RESTATED
                    ARTICLES OF INCORPORATION
                                OF
                 MADISON GAS AND ELECTRIC COMPANY

    (Including all amendments made through December 15, 1995)


  The following Restated Articles of Incorporation duly adopted
pursuant to the authority and provisions of the Wisconsin
Business Corporation Law supersede and take the place of the
heretofore existing Articles of Organization and amendments
thereto:

  Article First. The name of the corporation is MADISON GAS AND
ELECTRIC COMPANY.

  Article Second. The purpose of the Company shall be to engage
in any lawful activity within the purposes for which corporations
may be organized under the Wisconsin Business Corporation Law,
including but not by way of limitation, the production, purchase,
transmission, distribution and sale of gas and electricity and
any related products, by-products and merchandise, either
directly or indirectly, to or for the public, whether by itself
or in conjunction with others, and to transact any and all
business incidental to such purposes.

  Article Third.  A. Authorized Capital.

  The authorized capital stock of the Company shall be Two
Hundred Fifty-Three Million Three Hundred Seventy-Five Thousand
Dollars ($253,375,000) and shall consist of One Million One
Hundred Seventy-Five Thousand (1,175,000) shares of Cumulative
Preferred Stock, each of which said shares shall be $25 Par
Value, and Twenty-Eight Million (28,000,000) shares of Common
Stock, each of which said shares shall be $8 Par Value.

       B. Cumulative Preferred Stock.

(I)  Series and Variations Between Series. The Cumulative
Preferred Stock may be divided into and issued in series. The
Board of Directors is hereby expressly vested with authority to
divide such shares into series and cause such shares to be issued
from time to time in series, and, by resolution adopted prior to
the issue of shares of a particular series, to fix and determine
the following relative rights and preferences with respect to
such series, as to which matters the shares of a particular
series may vary from those of any or all other series:

  (a)  the distinctive serial designation of the shares of such
       series;
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  (b)  the rate of dividend thereof;

  (c)  the amount payable upon the shares in event of voluntary
       or involuntary liquidation (except as fixed in this
       Division B);

  (d)  the price or prices at and the terms and conditions on
       which shares may be redeemed (except as fixed in this
       Division B);

  (e)  sinking fund provisions for the redemption or purchase of
       such shares; and

  (f)  the terms and conditions on which such shares may be
       converted if the shares of any series are issued with the
       privilege of conversion.

Except as the shares of a particular series may vary from those
of any or all other series in the foregoing respects, all of the
shares of the Cumulative Preferred Stock, regardless of series,
shall in all respects be equal and shall have the relative rights
and preferences herein fixed.

(II)  Dividends. (a)  The holders of shares of Cumulative
Preferred Stock of each series shall be entitled to receive, as
and when declared payable by the Board of Directors from funds
legally available for the payment thereof, preferential dividends
in lawful money of the United States of America at the rate per
annum fixed and determined as herein authorized for the shares of
such series, but no more, payable quarterly on dates to be
established for all series when established by the Board of
Directors for the first series (the quarterly dividend payment
dates), in each year with respect to the quarterly period ending
on the day prior to each such respective dividend payment date.
Such dividends shall be cumulative with respect to each share
from and including the quarterly dividend payment date next
preceding the date of issue thereof unless (1) the date of issue
be a quarterly dividend payment date, in which case dividends
shall be cumulative from and including the date of issue, (2)
issued during an interval between a record date for the payment
of a quarterly dividend on shares of such series and the payment
date for such dividend, in which case dividends shall be
cumulative from and including such payment date, or (3) the Board
of Directors shall determine that the first dividend with respect
to shares of a particular series issued during an interval
between quarterly dividend payment dates shall be cumulative from
and including a date during such interval, in which event
dividends shall be cumulative from and including such date. No
dividends shall be declared on shares of Cumulative Preferred
Stock of any series in respect of accumulations for any quarterly
dividend period or portion thereof unless dividends shall
likewise be or have been declared with respect to accumulations
on all then outstanding shares of Cumulative Preferred Stock of
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each other series for the same period or portion thereof; and the
ratios of the dividends declared to dividends accumulated with
respect to any quarterly dividend period on the shares of each
series outstanding shall be identical. Accumulations of dividends
shall not bear interest.

  (b)  So long as any shares of Cumulative Preferred Stock remain
outstanding, no dividend shall be paid or declared, or other
distribution made, on shares of junior stock, nor shall any
shares of junior stock be purchased, redeemed, retired or
otherwise acquired for a consideration (1) unless preferential
dividends on outstanding shares of Cumulative Preferred Stock for
the current and all past quarterly dividend periods shall have
been paid, or declared and set apart for payment, provided,
however, that the restrictions of this subparagraph (1) shall not
apply to the declaration and payment of dividends on shares of
junior stock if payable solely in shares of junior stock, nor to
the acquisition of any shares of junior stock through application
of proceeds of any shares of junior stock sold at or about the
time of such acquisition, nor shall such restrictions prevent the
transfer of any amount from surplus to stated capital; and (2)
except to the extent of earned surplus, provided, however, that
the restriction in this subparagraph (2) shall not apply to any
of the acts described in the proviso set forth in subparagraph
(1) above and shall not apply either to the acquisition of any
shares of junior stock issued after April 1, 1970, to the extent
of the proceeds received for the issue of such shares, or to the
payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration said dividend
conforms with the provisions of this subparagraph (2).

(III)  Liquidation Preferences. (a)  In the event of voluntary
dissolution or liquidation of the Company, the holders of shares
of Cumulative Preferred Stock of each series outstanding shall be
entitled to receive out of the assets of the Company an amount
per share equal to that which such holders would have been
entitled to receive had shares held by them been redeemed
(otherwise than through operation of a sinking fund) on the date
fixed for payment, but no more, unless shares are not so
redeemable at such date, and then an amount per share to be fixed
in the resolution of the Board of Directors establishing the
series of which the shares are a part. In the event of
involuntary dissolution or liquidation of the Company, the
holders of shares of Cumulative Preferred Stock of each series
outstanding shall be entitled to receive out of the assets of the
Company $25 per share, plus preferential dividends at the rate
fixed and determined for such series as herein authorized,
accrued and unpaid to the date fixed for payment, but no more.
Until payment to the holders of outstanding shares of Cumulative
Preferred Stock as aforesaid, or until moneys or other assets
sufficient for such payment shall have been set apart for payment
by the Company, separate and apart from its other funds and
assets for the account of such holders, so as to be and continue
<PAGE>
to be available for payment to such holders, no payment or
distribution shall be made to holders of shares of junior stock
in connection with or upon such dissolution or liquidation. If
upon any such dissolution or liquidation the assets of the
Company available for payment and distribution to shareholders
are insufficient to make payment in full, as hereinabove
provided, to the holders of shares of Cumulative Preferred Stock,
payment shall be made to such holders ratably in accordance with
the number of shares held by them, respectively.

  (b)  Neither a consolidation nor merger of the Company with or
into any other corporation, nor a merger of any other corporation
into the Company nor the purchase or redemption of all or any
part of the outstanding shares of any class or classes of stock
of the Company, nor the sale or transfer of the property and
business of the Company as or substantially as an entirety shall
be construed to be a dissolution or liquidation of the Company
within the meaning of the foregoing provisions.

(IV)  Redemption. (a)  Except for any series which may not at the
time be redeemable, the Company may, at its option expressed by
vote of the Board of Directors, at any time or from time to time
redeem the whole or any part of the Cumulative Preferred Stock,
or of any series thereof, at the redemption price or prices at
the time in effect, any such redemption to be on such redemption
date and at such place in the City of Madison, State of
Wisconsin, City of Chicago, State of Illinois, or in the City,
County and State of New York, or any combination of the three, as
shall be determined by vote of the Board of Directors. Notice of
any proposed redemption of shares of Cumulative Preferred Stock
stating the series to be redeemed, the certificates within such
series to be redeemed if less than all of the shares of such
series are to be redeemed, and the date and place of redemption,
shall be given by the Company by depositing a copy of such notice
in the U.S. mails, not more than 60 or less than 30 days prior to
the redemption date, addressed to the holders of record of shares
of Cumulative Preferred Stock to be redeemed, at their respective
addresses then appearing on the books of the Company and such
notice shall be deemed delivered when so deposited; and by
publishing such notice at least once in each week for two
successive weeks in a newspaper customarily published at least on
each business day, other than Saturdays, Sundays and holidays,
which is printed in the English language and published and of
general circulation in the Borough of Manhattan, City and State
of New York, and in such a newspaper so printed which is
published and of general circulation in the City of Chicago,
State of Illinois. Publication of such notice shall be commenced
not more than 60 days, and shall be concluded not less than 30
days, prior to the redemption date, but such notice need not
necessarily be published on the same day of each week or in the
same newspaper. If publication is made, unintentional omissions
or errors in names or addresses in the mailed notice shall not
impair the validity of the notice. In case less than all of the
<PAGE>
shares of any series are to be redeemed, the shares so to be
redeemed shall be determined by lot in such manner as may be
prescribed by the Board of Directors unless a method other than
by lot is set forth in the resolution of the Board of Directors
establishing such series. The certificates evidencing the shares
to be so redeemed shall be specified by number in the notice of
such redemption and if less than all the shares evidenced by any
of the said certificates are to be redeemed, then the number of
shares to be redeemed shall be specified. On the redemption date
the Company shall, and at any time within 60 days prior to such
redemption date may, deposit in trust, for the account of the
holders of shares of Cumulative Preferred Stock to be redeemed,
funds necessary for such redemption with a bank or trust company
in good standing, organized under the laws of the United States
of America or of the State of Wisconsin or of the State of New
York or of the State of Illinois, doing business in the Cities of
Milwaukee or Madison, the State of Wisconsin, or in the City,
County and State of New York or in the City of Chicago, the State
of Illinois, and having combined capital, surplus and undivided
profit of at least $5,000,000, which shall be designated in such
notice of redemption.

  (b)  If notice of redemption shall have been duly given, or
said bank or trust company has been irrevocably authorized by the
Company to give such notice, and funds necessary for such
redemption have been deposited, all as aforesaid, then all shares
of Cumulative Preferred Stock with respect to which such deposit
shall have been made shall forthwith, whether or not the date
fixed for such redemption shall have occurred or the certificates
for such shares shall have been surrendered for cancellation, be
deemed no longer to be outstanding for any purpose, and all
rights with respect to such shares shall thereupon cease and
terminate, excepting only the right of the holders of the
certificates for such shares to receive, out of the funds so
deposited in trust, on the redemption date (unless an earlier
date is fixed by the Board of Directors), the redemption funds,
without interest, to which they are entitled, and the right to
exercise any privilege of conversion not theretofore expiring,
the Company to be entitled to the return of any funds deposited
for redemption of shares converted pursuant to such privilege. At
the expiration of 6 years after the redemption date such trust
shall terminate. Any such moneys then remaining on deposit,
together with any interest thereon which may be allowed by the
bank or trust company with which the deposit shall have been
made, shall be paid by it to the Company, free of trust, and
thereafter the holders of the certificates for such shares shall
have no claim against such bank or trust company but only claims
as unsecured creditors against the Company for the amounts
payable upon redemption thereof, without interest. Interest, if
any, allowed by the bank or trust company as aforesaid shall
belong to the Company.
<PAGE>
  (c)  Subject to applicable law and this Article Third, the
Company may from time to time purchase or otherwise acquire
outstanding shares of Cumulative Preferred Stock at a price per
share not exceeding the amount (inclusive of any premium over par
value and any accrued dividends) then payable in the event of
redemption thereof otherwise than through operation of a sinking
fund, if any.

  (d)  No shares of Cumulative Preferred Stock shall be
purchased, redeemed or otherwise acquired for a valuable
consideration (1) in any case if all dividends on the Cumulative
Preferred Stock for all past quarter yearly dividend periods
shall not have been paid or declared and a sum sufficient for the
payment thereof set apart, or (2) at any time when the Company
shall be in default or deficient under any requirement of a
sinking fund established with respect to outstanding shares of
any series of Cumulative Preferred Stock for any period then
elapsed, except for the purpose of wholly or partially
eliminating such default or deficiency.

  (e)  Subject to the provisions of this Article Third, any and
all shares of Cumulative Preferred Stock which at any time shall
have been:

    (1)  Redeemed or otherwise retired by the Company, except in
  the manner set forth in (2) below, shall assume the status of
  authorized but unissued Cumulative Preferred Stock and may
  thereafter be reissued in the same manner as other authorized
  but unissued Cumulative Preferred Stock.

    (2)  Redeemed or purchased through operation of any sinking
  fund with respect thereto, or which shall have been converted
  into or exchanged for shares of any other class or classes or
  other securities of the Company pursuant to a right of
  conversion or exchange reserved in such Cumulative Preferred
  Stock, shall be canceled and shall not be reissued, and the
  Company shall, from time to time, take such corporate action as
  may be appropriate or necessary to reduce the authorized number
  of shares of Cumulative Preferred Stock accordingly.

(V)  Voting Rights. The holders of Cumulative Preferred Stock
shall have no vote in the affairs of the corporation except as is
provided below or at the time may be mandatorily required by
statute:

  (a)  So long as any shares of Cumulative Preferred Stock are
outstanding, the Company shall not, without the consent (given by
vote in person or by proxy at a meeting called for that purpose)
of the holders of at least two-thirds of the shares of Cumulative
Preferred Stock then outstanding:
<PAGE>
    (1)  Create or authorize any shares of senior stock, or
  create or authorize any obligation or security convertible into
  any such shares; or

    (2)  Alter or change the relative rights or preferences of
  then outstanding Cumulative Preferred Stock so as to affect the
  holders thereof adversely, provided, however, if any such
  alteration or change would adversely affect the holders of one
  or more, but not all, of the series of Cumulative Preferred
  Stock at the time outstanding, only the consent of holders of
  two-thirds of the shares of each series so affected shall be
  required; or

    (3)  Issue, sell or otherwise dispose of shares of Cumulative
  Preferred Stock, or any shares of senior or parity stock, or
  securities convertible into shares of Cumulative Preferred
  Stock or into shares of senior or parity stock, other than in
  exchange for, or in connection with the retirement (by
  redemption or otherwise) of, not less than a like number of
  shares of Cumulative Preferred Stock or shares of senior or
  parity stock, or securities convertible into not less than a
  like number of such shares, as the case may be at the time
  outstanding, unless:

     (i) Immediately after such proposed issue, sale or other
         disposition, the aggregate of the capital of the
         Company applicable to all shares of Common Stock then
         to be outstanding (including premium on all shares of
         Common Stock) plus earned surplus and capital surplus,
         shall be at least equal to the involuntary liquidation
         preference of all shares of Cumulative Preferred Stock
         and shares of senior or parity stock then to be
         outstanding, provided that until such additional shares
         or securities, as the case may be, or the equivalent
         thereof (in terms of involuntary liquidating
         preference) in shares of Cumulative Preferred Stock or
         senior or parity stock, shall have been retired, earned
         surplus of the Company used to meet the requirements of
         this clause in connection with the issuance of
         additional shares of Cumulative Preferred Stock or
         shares of senior or parity stock or securities
         convertible into either thereof shall not, after the
         issue of such shares or securities, be available for
         dividends or other distributions on Common Stock (other
         than dividends payable in Common Stock), except in an
         amount equal to the cash subsequently received by the
         Company as a contribution to its Common Stock capital
         or as consideration for the issuance of additional
         shares of Common Stock; and
<PAGE>
    (ii) The gross income of the Company for a period of 12
         consecutive calendar months within the 15 calendar
         months immediately preceding the issuance, sale or
         other disposition of such shares, determined in
         accordance with such system of accounts as may be
         prescribed by governmental authorities having
         jurisdiction in the premises, or, in the absence
         thereof, in accordance with sound accounting practice
         (but in any event after deducting the amount for said
         period charged by the Company on its books to
         depreciation expense and taxes) to be available for the
         payment of interest, shall have been equal to at least
         one and one-half times the sum of (x) the interest
         charges for one year on all interest-bearing
         indebtedness of the Company (plus all amortization of
         debt discount and expense, and less all amortization of
         premium on debt, applicable to the aforesaid 12 months'
         period) and (y) the dividend requirements for one year
         on all outstanding Cumulative Preferred Stock, and on
         all outstanding senior and parity stock; and for the
         purpose of both such computations the shares and any
         indebtedness then proposed to be issued shall be
         included, and any indebtedness and shares then proposed
         to be retired shall be excluded, and in determining
         such gross income the Board of Directors shall make
         such adjustments, by way of increase or decrease in
         such gross income, as shall in its opinion be necessary
         to give effect, for the entire 12 months for which such
         gross income is determined, to any acquisition or
         disposition of property, the income from which can be
         separately ascertained,

  in which event such consent shall not be required.

  (b)  So long as any Cumulative Preferred Stock is outstanding,
the Company shall not, without the consent (given by vote in
person or by proxy at a meeting called for that purpose) of the
holders of at least a majority of the shares of Cumulative
Preferred Stock then outstanding:
    (1)  Merge or consolidate with or into any other corporation,
  provided that this provision shall not apply to a purchase or
  other acquisition by the Company of franchises or assets of
  another corporation in any manner which does not involve a
  statutory merger or consolidation;

    (2)  Sell, lease, or exchange all or substantially all of its
  property and assets, unless the fair value of the net assets of
  the Company, after completion of such transaction, shall at
  least equal the then involuntary liquidation value of the
  Cumulative Preferred Stock of all series, and of all senior or
  parity stock, then outstanding.
<PAGE>
  (c)  No consent hereinbefore provided for in this subdivision
(V)(a) and (b) shall be required in the case of the holders of
any shares of Cumulative Preferred Stock which are to be redeemed
at or prior to the time when an alteration or change is to take
effect, or at or prior to the time of authorization, issuance,
sale or other disposition of any additional Cumulative Preferred
Stock or shares of senior or parity stock or convertible
securities, or a consolidation or merger is to take effect, as
the case may be.

  (d)  If at any time dividends on any of the outstanding shares
of Cumulative Preferred Stock shall be in default in an amount
equivalent to four or more full quarterly dividends, the holders
of outstanding shares of Cumulative Preferred Stock, voting
separately as a class, shall be entitled to elect either one-
fourth or two (whichever shall be greater) of the Directors of
the Company (herein called Certain Directors), which right shall
continue in force and effect until all arrears of dividends on
outstanding shares of Cumulative Preferred Stock shall have been
declared and paid or deposited in trust with a bank or trust
company having the qualification set forth in subdivision (IV) of
this Division B for payment on or before the next succeeding
dividends payment date, in which event, such right to elect
Certain Directors shall cease and terminate unless and until the
equivalent of four or more full quarterly dividends shall again
be in default on outstanding shares of Cumulative Preferred
Stock. Such right to elect Certain Directors is subject to the
following terms and conditions:

    (1)  Such right to elect Certain Directors may be exercised
  at any annual meeting of shareholders, or, within the
  limitations herein provided, at a special meeting of
  shareholders held for such purpose. Whenever such right to
  elect Certain Directors shall vest, on request signed by any
  holder of record of shares of Cumulative Preferred Stock then
  outstanding and delivered to the Company's principal office not
  less than 120 days prior to the date of the annual meeting next
  following the date when such right vests, the President or a
  Vice-President of the Company shall call a special meeting of
  shareholders to be held within 60 days after receipt of such
  request for the purpose of electing a new Board of Directors of
  which holders of outstanding shares of Cumulative Preferred
  Stock shall be entitled to elect Certain Directors and holders
  of outstanding shares otherwise entitled to vote shall be
  entitled to elect the remaining Directors, in each case to
  serve until the next annual meeting of shareholders or until
  their successors shall be elected and shall qualify.
<PAGE>
    (2)  Whenever, under the terms hereof, holders of outstanding
  shares of Cumulative Preferred Stock shall be divested of the
  right to elect Certain Directors, upon request signed by any
  holder of record of shares otherwise entitled to vote and
  delivered to the Company at its principal office not less than
  120 days prior to the date for the annual meeting next
  following the date of such divesting, the President or a Vice-
  President of the Company shall call a special meeting of the
  holders of shares otherwise entitled to vote, to be held within
  60 days after receipt of such request for the purpose of
  electing a new Board of Directors to serve until the next
  annual meeting or until their respective successors shall be
  elected and shall qualify.

    (3)  If, while holders of outstanding shares of Cumulative
  Preferred Stock are entitled to elect Certain Directors, the
  holders of shares entitled as a class to elect Directors shall
  fail to elect the full number of Directors which they are
  entitled to elect, either at an annual meeting of shareholders
  or a special meeting thereof held as in this subdivision (V)
  provided, or at an adjourned session of either thereof held
  within a period of 90 days beginning with the date of such
  meeting, then after the expiration of such period holders of
  outstanding shares of Cumulative Preferred Stock and holders of
  outstanding shares otherwise entitled to vote, voting as a
  single class, shall be entitled to elect such number of
  Directors as shall not have been elected during such period by
  holders of outstanding shares of the class or classes then
  entitled to elect the same, to serve until the next annual
  meeting of shareholders or until their successors shall be
  elected and shall qualify. The term of office of all Directors
  in office immediately prior to the date of such annual or
  special meeting shall terminate as and when a full Board of
  Directors shall have been elected at such meeting or a later
  meeting of shareholders for the election of Directors, or an
  adjourned session of either thereof.

    (4)  At any annual or special meeting of the shareholders or
  adjournment thereof, held for the purpose of electing Directors
  while the holders of outstanding shares of Cumulative Preferred
  Stock shall be entitled to elect Certain Directors, the
  presence in person or by proxy of the holders of a majority of
  outstanding shares of Cumulative Preferred Stock shall be
  necessary to constitute a quorum of Cumulative Preferred Stock
  for the election by such class of members to the Board of
  Directors and the presence in person or by proxy of the holders
  of a majority of outstanding shares otherwise entitled to vote
  shall be necessary to constitute a quorum of such shares for
  the election of Directors which holders of such shares are then
  entitled to elect. In case of a failure by the holders of any
  class or classes to elect, at such meeting or an adjourned
  session held within said period of 90 days, the number of
  Directors which they are entitled to elect at such meeting,
<PAGE>
such meeting shall be deemed ipso facto to have been adjourned to
reconvene at 11:00 A.M., Local Time, on the fourth full business
day next following the close of such 90-day period, at which
time, or at a subsequent adjourned session of such meeting, such
number of Directors as shall not have been elected during such
period by holders of outstanding shares of the class or classes
then entitled to elect the same, may be elected by holders of
outstanding shares of Cumulative Preferred Stock and holders of
outstanding shares otherwise entitled to vote, voting as a single
class. Subject to the preceding provisions of this subdivision
(V), a majority of the holders of shares of any class or classes
at the time present in person or by proxy shall have power to
adjourn such meeting for the election of Directors by holders of
shares of such class or classes from time to time without notice
other than announcement at the meeting.

  (5)  While the holders of outstanding shares of Cumulative
Preferred Stock remain entitled to elect Certain Directors, any
holder of record of outstanding shares of Cumulative Preferred
Stock shall have the right, during regular business hours, in
person or by a duly authorized representative, to examine the
Company's stock records of Cumulative Preferred Stock for the
purpose of communicating with other holders of shares of such
stock with respect to the exercise of such right of election, and
to make a list of such holders.

  (e)  Except as by statute at the time mandatorily provided,
holders of shares of Cumulative Preferred Stock shall not be
entitled to receive notice of any meeting of shareholders at
which they are not entitled to vote or consent.

(VI)  (Vacant) 

(VII)  (Vacant) 

(VIII)  (Vacant) 

(IX)  (Vacant) 

(X)  Series E Cumulative Preferred Stock. (a)  Establishment of
Series and Designation Thereof. There is established a series of
Cumulative Preferred Stock, the serial designation of the shares
of which shall be, and the shares of which shall be known as,
Series E Cumulative Preferred Stock. Such series shall be a
closed series consisting of 300,000 shares of Cumulative
Preferred Stock.

  (b)  Rate of Dividend. The rate of preferred dividends on the
shares of Series E Cumulative Preferred Stock shall be $2.175 per
share per annum, which shall be cumulative from and including
August 31, 1978, and shall be payable in quarterly installments
on February 1, May 1, August 1, and November 1 of each year.
<PAGE>
  (c)  Price at Which Redeemable. (1)  The shares of Series E
Cumulative Preferred Stock shall be redeemable at the option of
the Company at any time, or from time to time, after the issue
thereof, and prior to August 1, 1983, at $27.00 per share; on or
after August 1, 1983, but prior to August 1, 1988, at $26.60 per
share; on or after August 1, 1988, but prior to August 1, 1993,
at $26.20 per share; on or after August 1, 1993, but prior to
August 1, 1998, at $25.80 per share; on or after August 1, 1998,
but prior to August 1, 2003, at $25.40 per share; and on or after
August 1, 2003, at $25.00 per share; plus, in each case, an
amount equivalent to preferential dividends at the rate aforesaid
accrued and unpaid to the date of redemption; provided, however,
the shares of Series E Cumulative Preferred Stock shall not be
redeemable at the option of the Company prior to August 1, 1983,
directly or indirectly, (i) from or in anticipation of moneys
borrowed by or for the account of the Company, or (ii) from or in
anticipation of the proceeds of the issuance of any other shares
of Cumulative Preferred Stock, or senior or parity stock (as such
terms are defined in Division E), if such borrowing has an
effective interest cost to the Company or such shares have an
effective dividend cost to the Company of less than 8.70% per
annum, or if such borrowing or such shares have, as of the date
of the proposed redemption, a weighted average life less than the
remaining weighted average life of the Series E Cumulative
Preferred Stock. Weighted average life of any borrowing or
preferred stock means as at the time of the determination thereof
the number of years obtained by dividing the then remaining
dollar-years of such borrowing by the principal amount of such
borrowing or the aggregate involuntary liquidation preference of
the shares of such preferred stock. The term "remaining dollar-
years of any borrowing or preferred stock" means the amount
obtained by (1) multiplying the amount of each then remaining
sinking fund, serial maturity, or other required repayment,
redemption, or purchase, including repayment, redemption, or
purchase, at final maturity, by the number of years (calculated
at the nearest one-twelfth) which will elapse between the date of
proposed redemption and the date of that required repayment,
redemption, or purchase, and (2) totaling all the products
obtained in (1). If the Company makes any redemption of shares of
Series E Cumulative Preferred Stock on or after August 1, 1983,
but prior to August 1, 1988, which if made prior to August 1,
1983, would have been prohibited by the terms of this paragraph,
then the redemption price shall be $28.00 per share plus an
amount equivalent to preferential dividends at the rate aforesaid
accrued and unpaid to the date of redemption. The shares of
Series E Cumulative Preferred Stock shall be redeemable for
purposes of the sinking fund hereinafter provided at the price of
$25.00 per share plus an amount equivalent to preferential
dividends at the rate aforesaid accrued and unpaid to the date of
redemption.
<PAGE>
  (2)  If the Company shall, at any time, redeem at its option
less than all of the then outstanding shares of Series E
Cumulative Preferred Stock, it shall redeem such shares as
follows:

    (i)  From each purchaser on original issue, or any nominee
  of such purchaser ("Original Purchaser"), a number of full
  shares of Series E Cumulative Preferred Stock, which bears (as
  nearly as may be practicable) the same ratio to the total
  number of such shares to be redeemed as (A) the total number of
  shares of Series E Cumulative Preferred Stock held by such
  Original Purchaser on the date on which notice of such
  redemption is given bears to (B) the total number of such
  shares outstanding on such date, including such shares held by
  the Company as treasury shares; and

    (ii) From holders of shares of Series E Cumulative Preferred
  Stock other than Original Purchasers and other than the
  Company, by redemption by lot, a number of shares of Series E
  Cumulative Preferred Stock equal to the total number of such
  shares to be redeemed, less the number of such shares which the
  Company shall be required to redeem from Original Purchasers in
  accordance with the provisions of the preceding
  subparagraph (i).

  (d)  Sinking Fund. (1)  Within each 12 months' period
commencing with the 12 months' period ending August 1, 1984, and
ending with the 12 months' period ending August 1, 1993, the
Company shall acquire, subject to the restrictions contained in
this Article Third, either by redemption thereof or by purchase
thereof, at a price not exceeding the optional redemption price
then in effect, and shall retire 4,000 shares of Series E
Cumulative Preferred Stock, or the number of shares of such
series outstanding, whichever shall be less; and in each of the
12 months' periods commencing with the 12-month period ending
August 1, 1994, and ending with the 12-month period ending August
1, 1998, the Company shall similarly acquire 8,000 shares of
Series E Cumulative Preferred Stock; and in each of the 12 month-
periods commencing with the 12-month period ending August 1,
1999, and ending with the 12-month period ending August 1, 2008,
the Company shall similarly acquire 22,000 shares of Series E
Cumulative Preferred Stock; provided, however, that the
obligation hereunder shall be cumulative so that if the Company
shall be prevented by the restrictions contained in this Article
Third from acquiring during any 12 months' period the number of
shares of Series E Cumulative Preferred Stock which, in the
absence of such restrictions, it would be required to acquire
during such period, then, although the Company shall not be
deemed to have defaulted in the performance of the requirements
of this clause (d), it shall be and remain deficient in such
performance, and such deficiency shall be made good as soon as
practicable.
<PAGE>
  (2)  Such shares required to be acquired during each such 12
months' period shall be acquired as follows:

    (i)  From each Original Purchaser, by redemption or by
  purchase, a number of full shares of Series E Cumulative
  Preferred Stock which bears (as nearly as may be practicable)
  the same ratio to the total number of such shares required to
  be retired during such 12 months' period as (A) the total
  number of shares of Series E Cumulative Preferred Stock held by
  such Original Purchaser on the August 1 beginning such 12
  months' period bears to (B) the total number of such shares
  outstanding on such August 1, including such shares held by the
  Company as treasury shares; provided, however, that the
  Company's unsatisfied obligation to acquire shares during any
  such 12 months' period from any Original Purchaser shall at no
  time during such period exceed the number of shares then held
  by such Original Purchaser, and

    (ii) From holders of shares of Series E Cumulative Preferred
  Stock other than Original Purchasers and other than the Company,
  by redemption by lot or by purchase, a number of shares of Series
  E Cumulative Preferred Stock equal to the total number of such
  shares required to be acquired during such 12 months' period
  less the number of shares which the Company shall have acquired
  or shall be required to acquire during such 12 months' period
  from Original Purchasers in accordance with the provisions of
  the preceding subparagraph (i).

  (3)  During any 12-month period referred to in paragraph (1)
of this clause (d), the Company shall have the option to redeem
at the sinking fund redemption price up to that number of shares
of Series E Cumulative Preferred Stock which the Company is
obligated to acquire during such 12-month period pursuant to
paragraph (1) of this clause (d). Such shares shall be redeemed
from the Original Purchasers and each other stockholder in
accordance with the provisions of paragraph (2) of this clause
(d). Such option to redeem additional shares of Series E
Cumulative Preferred Stock shall not be cumulative and shares so
redeemed pursuant to this paragraph (3) shall not be credited
against the obligation of the Company to acquire shares of Series
E Cumulative Preferred Stock pursuant to paragraph (1) of this
clause (d).

  (4)  Any shares of Series E Cumulative Preferred Stock which
shall be redeemed by the Company at the optional redemption price
then in effect or purchased by the Company in any such 12 months'
period at a price not exceeding the optional redemption price,
and which shall not be applied to meet the Company's sinking fund
obligation for such 12 months' period, may be credited on the
amounts required to be acquired in any one or more of the
following 12 months' periods which the Company may designate. The
shares of its Series E Cumulative Preferred Stock of the Company
redeemed or purchased and applied to meet its sinking fund
obligations shall be canceled and shall not be reissued.
<PAGE>
  (e)  No Conversion Privilege. The shares of Series E
Cumulative Preferred Stock shall not be convertible into other
shares or securities of the Company.

      C. Common Stock

(I)  Dividends. Subject to the limitations in this Article Third
set forth, dividends may be paid on Common Stock out of any funds
legally available for the purpose, when and as declared by the
Board of Directors.

(II)  Liquidation Rights. In the event of any liquidation or
dissolution of the Company, after there shall have been paid to
or set aside for the holders of outstanding shares having
superior liquidation preferences to Common Stock the full
preferential amounts to which they are respectively entitled, the
holders of outstanding shares of Common Stock shall be entitled
to receive pro rata, according to the number of shares held by
each, the remaining assets of the Company available for
distribution.

(III)  Voting Rights. Except as set forth in this Article Third
or in Article Eighth or as by statute otherwise mandatorily
provided, the holders of the Common Stock shall exclusively
possess full voting powers for the election of Directors and for
all other purposes.

      D. Preemptive Rights.

  No holder of stock of this corporation of any class shall be
entitled as of right to subscribe for, purchase or receive any
part of any new or additional issue of stock of any class,
whether now or hereafter authorized, or of any bonds, debentures
or other securities convertible into stock of any class, and all
such additional shares of stock, bonds, debentures or other
securities convertible into stock may be issued and disposed of
by the Board of Directors to such person or persons, and on such
terms and for such consideration (so far as may be permitted by
law) as the Board of Directors in their absolute discretion may
deem advisable.

      E. Certain Definitions.

  In this Article Third, and in any resolution of the Board of
Directors adopted pursuant to this Article Third establishing a
series of the Cumulative Preferred Stock and fixing the
designation, description and terms thereof, the meanings below
assigned shall control:

  "Senior stock" shall mean shares of stock of any class ranking
prior to shares of Cumulative Preferred Stock as to dividends or
upon dissolution or liquidation; 
<PAGE>
  "Parity stock" shall mean shares of stock of any class ranking
on a parity with, but not prior to, shares of Cumulative
Preferred Stock as to dividends or upon dissolution or
liquidation;

  "Junior stock" shall mean shares of stock of any class ranking
subordinate to shares of Cumulative Preferred Stock as to
dividends and upon dissolution or liquidation; and

  Preferential dividends accrued and unpaid on a share of
Cumulative Preferred Stock to any particular date shall mean an
amount per share at the annual dividend rate applicable to such
share for the period beginning with the date from and including
which dividends on such share are cumulative and concluding on
the day prior to such particular date, less the aggregate of all
dividends paid with respect to such share during such period.

  Article Fourth. The number of Directors constituting the Board
of Directors, the classification of such Directors, and their
terms shall be fixed by the Bylaws of the Company. There shall
not be more than three classes of Directors, nor shall the terms
of any class of Directors be for more than three years. In no
event shall there be less than three Directors.

  Article Fifth. The bylaws of the Company may be adopted either
by the shareholders or the Board of Directors, but no bylaw
adopted by the shareholders shall be amended or repealed by the
Directors unless the bylaw adopted by the shareholders confers
such authority upon the Directors. Any bylaw adopted by the Board
of Directors shall be subject to amendment or repeal by the
shareholders as well as by the Directors.

  Article Sixth. At the time of the adoption of these Restated
Articles of Incorporation, the name of the registered agent and
the address of the registered office of the Company are:

    Agent: Gary J. Wolter
    Office:  Madison Gas and Electric Company
         133 South Blair Street
         (P.O. Box 1231)
         Madison, Wisconsin  53701

  Article Seventh. These articles may be amended by resolution
setting forth such amendment or amendments, adopted at any
meeting of the shareholders by a vote of at least two-thirds of
all of the stock of the Company then outstanding and then
entitled to vote.
<PAGE>
  Article Eighth. A. Certain Definitions.

  For purposes of this Article Eighth:

    (I)  "Affiliate" and "Associate" shall have the respective
  meanings ascribed to such terms in Rule 12b-2 under the
  Securities Exchange Act of 1934 as in effect on February 6,
  1985 (the term "registrant" in Rule 12b-2 meaning in this case
  the Company).

    (II) A person shall be a "beneficial owner" of any shares of
  Voting Stock (a) which such person or any of its Affiliates or
  Associates beneficially owns, directly or indirectly; (b) which
  such person or any of its Affiliates or Associates has,
  directly or indirectly, (i) the right to acquire (whether such
  right is exercisable immediately or subject only to the passage
  of time), pursuant to any agreement, arrangement or
  understanding or upon the exercise of conversion rights,
  exchange rights, warrants or options, or otherwise, or (ii) the
  right to vote pursuant to any agreement, arrangement or
  understanding; or (c) which are beneficially owned, directly or
  indirectly, by any other person with which such person or any
  of its Affiliates or Associates has any agreement, arrangement
  or understanding for the purpose of acquiring, holding, voting
  or disposing of any shares of Voting Stock. For the purposes of
  determining whether a person is a Substantial Shareholder
  pursuant to subdivision (V) of this division A, the number of
  shares of Voting Stock deemed to be outstanding shall include
  shares deemed beneficially owned by such person through
  application of this subdivision (II) of division A, but shall
  not include any other shares of Voting Stock that may be
  issuable pursuant to any agreement, arrangement or
  understanding, or upon exercise of conversion rights, warrants
  or options, or otherwise.

    (III)  "Person" shall mean any individual, firm, corporation
  or other entity and shall include any group comprised of any
  person and any other person with whom such person or any
  Affiliate or Associate of such person has any agreement,
  arrangement or understanding, directly or indirectly, for the
  purpose of acquiring, holding, voting or disposing of shares of
  Voting Stock.

    (IV)  "Subsidiary" shall mean any corporation of which a
  majority of each class of equity security is beneficially owned
  by the Company.

    (V)  "Substantial Shareholder" shall mean any person (other
  than the Company or any Subsidiary and other than any profit-
  sharing, employee stock ownership or other employee benefit
  plan of the Company or any Subsidiary or any trustee of or
  fiduciary with respect to any such plan when acting in such
  capacity) who (without giving effect to the provisions of
<PAGE>
division B of this Article Eighth) is the beneficial owner of
shares of Voting Stock representing ten percent (10%) or more of
the votes entitled to be cast by the holders of all then
outstanding shares of Voting Stock.

    (VI)  "Voting Stock" shall mean the Common Stock of the
  Company and any class or series of preferred or preference
  stock (other than the Company's Cumulative Preferred Stock,
  authorized pursuant to division B of Article Third) authorized
  and outstanding from time to time pursuant to Article Third
  entitling the holder thereof to vote on the matter with respect
  to which a determination is being made pursuant to this Article
  Eighth; provided, however, that the shareholders or the Board
  of Directors, as the case may be, may specify in the resolution
  authorizing any such class or series of preferred or preference
  stock that the shares of such class or series shall not
  constitute Voting Stock and that such shares and the holders
  thereof shall be exempt from the provisions of this Article
  Eighth.

B. Limitation of Voting Rights.

  Any provision of these Restated Articles of Incorporation to
the contrary notwithstanding, so long as any person is a
Substantial Shareholder, the shareholders of record of the shares
of Voting Stock beneficially owned by such Substantial
Shareholder shall have limited voting rights on any matter
requiring their vote or consent, as follows:

    (I)  With respect to the shares of Voting Stock which would
  entitle such shareholders of record in the aggregate to cast up
  to ten percent (10%) of the total number of votes entitled to
  be cast by the holders of all outstanding shares of Voting
  Stock, such shareholders of record shall be entitled to cast
  the votes per share specified in or pursuant to Article Third.

    (II)  With respect to the shares of Voting Stock which would
  entitle such shareholders of record in the aggregate to cast in
  excess of ten percent (10%) of the total number of votes
  entitled to be cast by the holders of all outstanding shares of
  Voting Stock, such shareholders of record shall be entitled to
  cast only one/one-hundredth (1/100th) of the votes per share to
  which a holder of such shares would otherwise be entitled to
  cast.

    (III)  Notwithstanding the foregoing, in the event that,
  after giving effect to the provisions of subdivisions (I) and
  (II) of this division B, the aggregate voting power of such
  shareholders of record would still exceed fifteen percent (15%)
  of the votes entitled to be cast by the holders of all
  outstanding shares of Voting Stock, the aggregate voting power
  of such shareholders of record shall be further limited so that
  such shareholders of record shall be entitled to cast only such
<PAGE>
number of votes that would equal (after giving effect to the
provisions of this Article Eighth) fifteen percent (15%) of the
number of votes entitled to be cast by all holders of outstanding
shares of Voting Stock.

    (IV)  The aggregate voting power of such shareholders of
  record, as limited pursuant to the provisions of division B,
  subdivisions (II) and (III) of this Article Eighth, for all
  shares of Voting Stock beneficially owned by such Substantial
  Shareholder shall be allocated proportionately among such
  shareholders of record. In this connection, each such
  shareholder of record shall be entitled to cast in respect of
  his shares of Voting Stock the number of votes equal to (a) the
  aggregate number of votes entitled to be cast (after giving
  effect to the provisions in this Article Eighth) in respect of
  the outstanding shares of Voting Stock beneficially owned by
  the Substantial Shareholder, multiplied by (b) a fraction the
  numerator of which is the number of votes which the shares of
  Voting Stock owned by such shareholder of record would have
  entitled such shareholder of record to cast were no effect
  given to the provision of this Article Eighth, and the
  denominator of which is the total number of votes which all
  shares of Voting Stock beneficially owned by the Substantial
  Shareholder would have entitled their record holders to cast
  were no effect given to the provisions of this Article Eighth.

C. Quorum.

  The presence, in person or by proxy, of the holders of record
of shares of Voting Stock entitling the holders thereof to cast a
majority of the votes (after giving effect, if required, to the
provisions of this Article Eighth) entitled to be cast by the
holders of all outstanding shares of Voting Stock entitled to
vote shall constitute a quorum at all meetings of the
shareholders.

D. Factual Determinations.

    (I)  The Board of Directors shall have the power and duty to
  determine for the purposes of this Article Eighth, on the basis
  of information known to them after reasonable inquiry, (a)
  whether a person is a Substantial Shareholder, (b) the number
  of shares of Voting Stock beneficially owned by any person, (c)
  whether a person is an Affiliate or an Associate of another,
  and (d) the persons who may be deemed to be the record holders
  of shares of which a Substantial Shareholder is a beneficial
  owner. Any such determination made in good faith shall be
  binding and conclusive on all parties.

    (II) The Board of Directors shall have the right to demand
  that any person who is reasonably believed to be a Substantial
  Shareholder (or holds of record shares of Voting Stock
  beneficially owned by a Substantial Shareholder) supply the
<PAGE>
Company with complete information as to (a) the record holder(s)
of all shares beneficially owned by such person who is reasonably
believed to be a Substantial Shareholder, (b) the number of
shares of Voting Stock beneficially owned by such person who is
reasonably believed to be a Substantial Shareholder and held of
record by each such shareholder of record, and (c) any other
factual matter relating to the applicability or effect of this
Article Eighth, as may reasonably be requested of such person,
and such person shall furnish such information within ten (10)
days after the receipt of such demand.

E. No Derogation of Fiduciary Obligations.

  Nothing contained in this Article Eighth shall be construed to
relieve any Substantial Shareholder from any fiduciary obligation
imposed by law.

F. Severability.

  In the event that any provision or portion of a provision of
this Article Eighth is determined to be invalid, void, illegal or
unenforceable, the remainder of the provisions of this Article
Eighth shall continue to be valid and enforceable and shall in no
way be affected, impaired or invalidated.