Exhibit 10.38

Wisconsin Energy Corporation
Performance Unit Plan

 1. Purpose. The purposes of the Wisconsin Energy Corporation Performance Unit
    Plan (the "Plan") are to enhance the long-term stockholder value of
    Wisconsin Energy Corporation (the "Company") by reinforcing the incentives
    of key executives to achieve long-term performance goals of the Company; to
    link a significant portion of executives' compensation to total shareholder
    return; to attract and motivate executives and to encourage their continued
    employment on a competitive basis. The purposes of the Plan are to be
    achieved by the grant of Performance Units. Capitalized terms used in the
    Plan shall have the meanings set forth in Section 8 of this Plan, unless the
    context clearly indicates otherwise. The Plan was originally effective
    January 1, 2005 and is hereby amended and restated effective as of October
    11, 2007.
    
    

 2. Administration. The Plan shall be administered by the Compensation Committee
    of the Company's Board of Directors. Subject to the provisions of the Plan,
    the Committee shall have full and final authority to:

        (a) designate the employees to whom Performance Units shall be granted;

        (b) determine the number of Performance Units to be granted to each
    employee;

        (c) impose such limitations, restrictions and conditions upon any such
    Performance Units as the Committee shall deem appropriate;

        (d) waive in whole or in part any limitations, restrictions or
    conditions imposed upon any such Performance Units as the Committee shall
    deem         appropriate; and

        (e) interpret the provisions of the Plan.

    All decisions of the Committee shall be final and binding upon all parties
    including the Company, its stockholders and Employees.

 3. Eligibility and Participation. Key employees of the Company and/or its
    subsidiaries are designated for participation in the Plan by the Committee.
    The Committee shall also designate the number of Performance Units to be
    granted to the Employee at the Target 100% rate.

    Performance Units.

    (a) Performance Unit Defined. A Performance Unit is a right to receive a
    cash payment from the Company that is based upon the value of shares of    
         Company Stock and is contingent on the Company's Total Shareholder
    Return during a three-year performance period. The Committee may establish
    the      three-year performance periods. The Performance Units granted under
    this Plan will be reflected in a book account maintained by the Company for
    each      Employee until they have become vested or have been forfeited.

    (b) Regular Vesting Of Performance Units. Except as otherwise provided in
    paragraph (c) below, Performance Units shall be vested based upon the
         Company's rank in Total Shareholder Return over the three-year
    performance period, relative to selected benchmark electric utilities with
    similar long-    term strategies. The regular vesting schedule for the
    Performance Units is as set forth in the following schedule:

    Percentile Rank
    
    Vesting %
    
    <25th Percentile
    
    25th Percentile
    
    Target (50th Percentile)
    
    75th Percentile
    
    90th Percentile or above
    
    0%
    
    25%
    
    100%
    
    125%
    
    175%
    
    

     

    The calculation of the Employee's vesting percentage shall be subject to the
    following rules:

              (i) The Committee shall select the benchmark electric utilities at
    the beginning of the three-year performance period.

              (ii) The Committee shall make appropriate changes to the
    percentile rank calculations to reflect corporate transactions affecting the
    benchmark electric              utilities (e.g., corporate mergers). The
    Committee's determination regarding such changes shall be binding upon the
    Company and Employees.

              (iii) In the event that the Company's percentile rank is between
    the benchmarks identified in the left hand column, the vesting percentage
    shall be              determined by interpolating the appropriate vesting
    percentage. For example, if the Company ranks 12th best of 30 benchmark
    electric utilities (or             60th percentile), the vesting percentage
    would be 110%, and if the Company ranks 6th best of the 30 benchmark
    electric utilities (or 80th percentile),              the vesting percentage
    would be 141.66%.

    Except as provided in paragraph (c) below, any unvested Performance Units
    are immediately forfeited upon the Employee's cessation of employment with
    the Company or a subsidiary prior to the completion of the three-year
    performance period.

        (c) Special Vesting Of Performance Units. The Performance Units shall
    become immediately vested at the Target 100% rate upon the occurrence of
            any of the following events (the "Special Vesting Events"):

             (i) the termination of the Employee's employment with the Company
    or a subsidiary by reason of Disability or death, or

            (ii) the occurrence of a Change in Control of the Company while the
    Employee is employed by the Company or a subsidiary.

    Further, a prorated number of the Performance Units shall become vested upon
    the termination of the Employee's employment with the Company or a
    subsidiary by reason of Retirement prior to the end of the three-year
    performance period. The number of Performance Units becoming vested shall be
    determined by multiplying the number of Performance Units at the Target 100%
    rate by a fraction, with the numerator of the fraction being the number of
    completed calendar months between Employee's Retirement date and the
    beginning of the performance period and the denominator being thirty-six
    (36). Therefore, if Employee retires on September 15 of the second year in
    the three-year performance period, the number of Performance Units becoming
    vested as a result of Employee's Retirement shall be equal to the number of
    Performance Units at the Target 100% rate times 20/36.

       (d) Cash Dividend Adjustment. Whenever the Company declares a cash
    dividend on Company Stock, an Employee who is employed on the dividend
            declaration date shall be entitled to receive a cash amount
    determined by multiplying (a) the number of Performance Units at the Target
    100% rate        on the dividend declaration date, times (b) the amount of
    the cash dividend paid by the Company on a share of Company Stock. The
    deemed dividend         equivalent shall be paid to the Employee within a
    reasonable period of time after the dividends are paid to Company
    stockholders.

       (e) Settlement Of Performance Units. As soon as practicable after the
    Performance Units become vested pursuant to paragraph (b) or (c) above, the
           Company shall pay to the Employee an amount in cash determined by
    multiplying (i) the number of Performance Units which have become vested, by
    (ii)        the Fair Market Value of the Company Stock. In no event shall
    payment be made later than March 15 of the taxable year following the
    taxable year in        which such Performance Units vest pursuant to
    paragraph (b) or (c) above.

    5. Shareholder Rights; Voting. An Employee shall not, by reason of any
    Performance Units granted hereunder, have any rights of a shareholder of the
    Company and shall have no voting rights with respect to any Performance
    Units.

    6. Non-transferability. Performance Units are not transferable otherwise
    than by will or the laws of descent and distribution. If an Employee dies
    prior to the payment, any amount payable under the Plan shall be paid to the
    Employee's "Designated Beneficiary." The "Designated Beneficiary" shall be
    the beneficiary or beneficiaries designated by the Employee in a writing
    filed with the Committee in such form and at such time as the Committee may
    require. In the absence of a living Designated Beneficiary, any rights or
    benefits that would have been exercisable by or distributable to the
    Employee shall be exercised by or distributed to the legal representative of
    Employee's estate or the person to whom the benefit passes by will or by the
    laws of descent and distribution.

    7. Adjustments.Notwithstanding any other provision herein, in the event of
    any merger, reorganization, consolidation, recapitalization, liquidation,
    stock dividend, split-up, share combination, or other change in the
    corporate structure of the Company affecting the Company Stock, such
    adjustment shall be made in the number of Performance Units granted to
    Employees as may be determined by the Committee, in its sole discretion, to
    be appropriate and equitable to prevent dilution or enlargement of rights.

    8. Definitions. For Plan purposes, except where the context clearly
    indicates otherwise, the following terms shall have the meanings set forth
    below:

         (a) "Beneficial Owner" shall have the meaning set forth in Rule 13d-3
    under the Exchange Act.

         (b) "Board" shall mean the Board of Directors of the Company

         (c) "Change in Control" shall be deemed to have occurred if the event
    set forth in any one of the following subparagraphs shall have occurred:

              (i) any person is or becomes the Beneficial Owner, directly or
    indirectly, of securities of the Company (not including in the securities
    beneficially owned              by such Person any securities acquired
    directly from the Company or its subsidiaries) representing 20% or more of
    the combined voting power of              the Company's then outstanding
    securities, excluding any person who becomes such a Beneficial Owner in
    connection with a transaction described              in clause (i) of
    paragraph (iii) below; or

              (ii) the following individuals cease for any reason to constitute
    a majority of the number of directors then serving: individuals who, on the
    date hereof,              constitute the Board and any new director (other
    than a director whose initial assumption of office is in connection with an
    actual or threatened              election contest, including but not
    limited to a consent solicitation, relating to the election of directors of
    the Company) whose appointment or              election by the Board or
    nomination for election by the Company's shareholders was approved or
    recommended by a vote of at least two-thirds of              the directors
    then still in office who either were directors on the date hereof or whose
    appointment, election or nomination for election was              previously
    so approved or recommended; or

              (iii) there is consummated a merger or consolidation of the
    Company or any direct or indirect subsidiary of the Company with any other
    corporation,               other than (i) a merger or consolidation
    immediately following which the directors of the Company immediately prior
    to such merger or consolidation               continue to constitute at
    least a majority of the board of directors of the Company, the surviving
    entity or any parent thereof or (ii) a merger or              consolidation
    effected to implement a recapitalization of the Company (or similar
    transaction) in which no person is or becomes the Beneficial
                 Owner, directly or indirectly, of securities of the Company
    (not including in the securities Beneficially Owned by such Person any
    securities               acquired directly from the Company or its
    subsidiaries) representing 20% or more of the combined voting power of the
    Company's then              outstanding securities; or

              (iv) the shareholders of the Company approve a plan of complete
    liquidation or dissolution of the Company or there is consummated an
    agreement (or              series of related agreements) for the sale or
    disposition by the Company of all or substantially all of the Company's
    assets, disregarding any             sale or disposition to a company at
    least a majority of the directors of which were directors of the Company
    immediately prior to such sale or             disposition; or

              (v) the Committee determines in its sole and absolute discretion
    that there has been a Change in Control of the Company.

         (d) "Committee" means the Compensation Committee of the Company's
    Board.

         (e) "Company" means Wisconsin Energy Corporation, or any successor
    thereto.

         (f) "Company Stock" shall mean the common stock of the Company, and
    such other stock and securities as may be substituted therefore.

         (g) "Disability" means separation from the service of the Company or a
    subsidiary because of such illness or injury as renders the Employee unable
    to           perform the material duties of the Employee's job.

         (h) "Employee" shall mean an employee who has been selected to
    participate in the Plan by the Committee.

         (i) "Exchange Act" means the Securities Exchange Act of 1934, as
    amended from time to time, or any successor Act thereto.

         (j) "Fair Market Value" means:

                (i) for purposes of determining the amount payable pursuant to
    paragraph (b), the closing price for a share of Company Stock on the last
    day in the                performance period on which the New York Stock
    Exchange (or such other exchange or over the counter on which Company Stock
    is listed) is               open for active trading; and

                (ii) for purposes of determining the amount payable pursuant to
    paragraph (c), the closing price for a share of Company Stock on the date
    the                 Performance Units become vested pursuant to such
    paragraph. If the New York Stock Exchange (or such other exchange or over
    the counter on                which Company Stock is listed) is not open for
    active trading on such date, then the nearest date before such date on which
    the New York Stock                Exchange (or such other exchange or over
    the counter on which Company Stock is listed) is open shall be used.

         (k) "Person" shall have the meaning given in Section 3(a)(9) of the
    Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof,
    except that             such term shall not include (i) the Company or any
    of its subsidiaries, (ii) a trustee or other fiduciary holding securities
    under an employee benefit plan             of the Company or any of its
    subsidiaries, (iii) an underwriter temporarily holding securities pursuant
    to an offering of such securities, or (iv) a             corporation owned,
    directly or indirectly, by the stockholders of the Company in substantially
    the same proportions as their ownership of the stock of             the
    Company.

         (l) "Plan" means the Wisconsin Energy Corporation Performance Unit
    Plan.

        (m) "Retirement" means separation from the service of the Company or a
    subsidiary at or after age 60.

        (n) "Total Shareholder Return" means: the calculation of total return
    (stock price appreciation plus reinvested dividends) for a peer electric
    utility based           upon an initial investment of $100 and subsequent
    $100 investments at the end of each quarter during the three-year
    performance period.

    9. Tax Withholding. The Company shall have the right to deduct from any
    payment made under the Plan the amount of any federal, state or local taxes
    of any kind required by law to be withheld with respect to the grant,
    vesting, payment or settlement of an award under this Plan, or to take such
    other action as may be necessary in the opinion of the Company to satisfy
    all obligations for the payment of such taxes.

    10. Governing Law. The law of the State of Wisconsin, except its law with
    respect to choice of law, shall be controlling in all matters relating to
    the Plan.

    11. Plan Amendment and Termination. The Committee may, in its sole
    discretion, amend, suspend or terminate the Plan at any time, with or
    without advance notice to Employees, provided that no amendment,
    modification or termination of the Plan may adversely affect in a material
    manner any right of any Employee with respect to any Performance Units
    theretofore granted without such Employee's written consent.