<PAGE>

                                                                   Exhibit 99.1


                                March 24, 1997



ESELCO, Inc.
Attention: William R. Gregory, President
  and Chief Executive Officer
725 East Portage Avenue
Sault Ste. Marie, MI  49733

Gentlemen:

     This letter (the "Letter of Intent") outlines the basic terms of the
proposed acquisition by Wisconsin Energy Corporation ("WEC") of all the
outstanding shares of common stock of ESELCO, Inc. ("ESELCO"), including all
options and shares of Restricted Stock (the "Shares"), on the terms and
conditions set forth in this Letter of Intent (the "Transaction"). This
Letter of Intent has been approved by the Board of Directors of ESELCO. The
parties acknowledge that WEC is a party to an Amended and Restated Agreement
and Plan of Merger with Northern States Power Company ("NSP") and other
parties dated as of April 28, 1995 as amended and restated on July 26, 1995
(the "Primergy Agreement"). Upon the closing of the transactions described in
the Primergy Agreement, WEC and NSP will enter into a business combination,
WEC's name will be changed to Primergy Corporation and Primergy Corporation
will continue to be bound by the terms of this Letter of Intent, provided
that the accomplishment of the closing of the transactions described in the
Primergy Agreement is not a condition to the closing of the Transaction
described in this Letter of Intent.

     The Transaction will be accomplished as follows:

     1.   FORM OF TRANSACTION.   The Transaction is proposed to be
accomplished by a tax-free merger of ESELCO with a subsidiary of WEC.

     2.   CONSIDERATION.  In connection with the effectiveness of the
Transaction, all of the Shares will be converted into shares of WEC common
stock based on a value of $44.50 (the "Per Share Value") for each of the
Shares. ESELCO has informed WEC that, following ESELCO's 3% stock dividend
which was declared on March 13, 1997, there will be 1,593,765 Shares
outstanding which results in a total value in the Transaction for all of the
Shares of $70,922,542. The exact number of shares of WEC common stock to be
issued in the

<PAGE>

ESELCO, Inc.
Attention: William R. Gregory, President
 and Chief Executive Officer
March 24, 1997
Page 2



Transaction will be determined by dividing the Per Share Value by the average
of the closing prices of WEC Common Stock as reported in The New York Stock
Exchange-Composite Transactions on each of the ten (10) consecutive trading
days immediately preceding the Closing Date.

     3.   INVESTIGATION.

          (a)   ACCESS.  ESELCO hereby grants to WEC, and the agents,
accountants, attorneys and representatives of WEC, reasonable access, upon
reasonable notice and during normal business hours, to all of the books,
records, financial statements, facilities, key personnel and other documents
and materials relating to ESELCO's financial condition, assets, liabilities
and business.

          (b)   MERGER AGREEMENT.  The execution of the definitive Merger
Agreement described below is subject to a complete legal, financial and
business review by WEC of the financial condition, assets, liabilities and
business of ESELCO.

          (c)   CONFIDENTIALITY AGREEMENT.  The existing Confidentiality
Agreement between ESELCO and WEC dated January 16, 1997 shall remain in full
force and effect.

    4.   MERGER AGREEMENT

         (a)   PREPARATION.  The parties will negotiate and prepare a
mutually acceptable Merger Agreement and other appropriate agreements
containing representations, warranties, agreements, conditions and
indemnities normally associated with transactions similar to the Transaction,
including:

               (i)  APPROVALS.  A condition to the obligations of all parties
that all applicable filings, consents and expirations of waiting periods
required by law, regulatory authorities or presently existing contracts shall
have been obtained, including any required approvals of the Michigan Public
Service Commission, the Federal Energy Regulatory Commission, the Securities
and Exchange Commission, the Public Service Commission of Wisconsin, NSP and
the completion of any required Hart-Scott-Rodino filings and the expiration
or early termination of all applicable waiting periods thereunder.

<PAGE>

ESELCO, Inc.
Attention: William R. Gregory, President
 and Chief Executive Officer
March 24, 1997
Page 3


               (ii)   SHAREHOLDER APPROVAL.  A condition to the obligations
of WEC and ESELCO that all necessary Shareholder approvals shall have been
obtained by ESELCO.

               (iii)  BOARD APPROVALS.  A condition to the obligations of WEC
and ESELCO that the Board of Directors of each of WEC and ESELCO shall have
approved the definitive Merger Agreement described below.

               (iv)  TAX STATUS; POOLING.  A condition to the obligations of
WEC and ESELCO that reasonable assurances have been received that the
Transaction is a tax-free reorganization and that the Transaction will be
accounted for as a pooling of interests.

               (v)  FAIRNESS OPINION.  A condition to the obligations of WEC
and ESELCO that the Board of Directors of ESELCO shall have received an
opinion of ESELCO's financial advisor to the effect that the terms of the
Transaction are fair to the Shareholders of ESELCO from a financial point of
view.

               (vi)  NO ESELCO CHANGE.  A condition to WEC's obligation that
there shall be: (A) no material adverse changes in the financial condition,
property, business, operations, results of operations or prospects of ESELCO;
and (B) no more than 1,593,765 Shares outstanding on the Closing Date.

               (vii)  NO WEC CHANGE.  A condition to ESELCO's obligation that
there shall be no material adverse changes in the consolidated financial
condition, property, business, operations, results of operations or prospects
of WEC, except that the status of the transactions described in the Primergy
Agreement shall not be considered by ESELCO pursuant to this condition.

          (b)  SIGNING.  WEC will cause its counsel to immediately prepare
the first draft of the definitive Merger Agreement. It is anticipated that
the definitive Merger Agreement will be signed as soon as possible, but in
any event on or prior to May 15, 1997.

     5.   OTHER TRANSACTIONS.

          (a)  DEFINITIONS.  As used in this Letter of Intent, the following
terms shall have the meanings specified:

<PAGE>

ESELCO, Inc.
Attention: William R. Gregory, President
 and Chief Executive Officer
March 24, 1997
Page 4


               (i)  "Company" shall mean ESELCO or any of its subsidiaries.

               (ii)  "Other Offer" shall mean any inquiry, proposal or offer
relating in any manner to an Other Transaction.

               (iii)  "Other Transaction" shall mean any of the following on
or prior to June 1, 1997, other than the Transaction with WEC as contemplated
by this Letter of Intent: (A) a merger, consolidation, share exchange,
exchange of securities, reorganization, business combination or other similar
transaction involving the Company; (B) a sale, transfer or other disposition
of all or a significant portion of the assets of the Company in a single
transaction or series of related transactions; (C) a sale of, or tender offer
or exchange offer for, or acquisition by any person or group of beneficial
ownership of, a substantial interest in the outstanding capital stock of the
Company in a single transaction or series of related transactions; or (D) a
public announcement of a proposal, plan, intention or agreement to do any of
the foregoing.

               (iv)  "Special Event" shall mean any of the following to occur
on or prior to June 1, 1997:  (A) a person unrelated to WEC has consummated,
or has publicly announced or proposed (and subsequently consummates after
June 1, 1997), an Other Transaction; or (B) a person unrelated to WEC has
consummated an Other Transaction or the Company has entered into an agreement
with respect to an Other Transaction; or (C) ESELCO shall have terminated
this Letter of Intent for the purpose of pursuing an Other Offer or Other
Transaction.

          (b)   TERMINATION OF DISCUSSIONS.   ESELCO shall immediately cease
and cause to be terminated all existing discussions and negotiations, if any,
with any parties conducted prior to the date of this Letter of Intent with
respect to any Other Transaction, except that ESELCO may notify such other
parties that the discussions and negotiations are terminated.

          (c)   NON SOLICITATION.  ESELCO shall not, and shall not permit its
subsidiaries or officers, directors, employees, agents or other
representatives of the Company (including, without limitation, any investment
banker, attorney or accountant retained or engaged by the Company) to,
solicit, initiate, facilitate, encourage, negotiate with respect to, discuss
or agree to, any

<PAGE>


ESELCO, INC.
Attention: William R. Gregory, President
 and Chief Executive Officer
March 24, 1997
Page 5

Other Offer or any Other Transaction, except to the extent required by the
fiduciary duties of the Company's officers and Board of Directors under
applicable law if so advised by a written opinion of outside counsel. ESELCO
shall notify WEC orally and in writing within twenty-four (24) hours
following receipt by the Chairman of the Board or President of ESELCO of any
Other Offer, including the terms and conditions of any such Other Offer and
the person making such Other Offer, except to the extent that ESELCO may be
prohibited from so doing by a contract entered into prior to the date of this
Letter of Intent. ESELCO shall give WEC five (5) calendar days prior notice
and an opportunity to negotiate with ESELCO before entering into, executing
or agreeing to any Other Offer or Other Transaction. Nothing in this Section
5 of this Letter of Intent shall prohibit ESELCO from taking and disclosing
to ESELCO's stockholders a position contemplated by Rule 14e-2(a) under the
Securities Exchange Act of 1934, as amended, with respect to an Other
Transaction by means of a tender offer.

          (d)  TERMINATION.  ESELCO may, by notice to WEC at any time prior
to the effective time of the Transaction described in this Letter of Intent,
terminate this Letter of Intent if the Company enters into, executes or
agrees to an Other Offer or Other Transaction following a determination by
the Board of Directors of ESELCO on the written advice of counsel that such
action is required by its fiduciary duties under applicable law and
compliance by ESELCO with the provisions of Section 5(c) of this Letter of
Intent.

          (e) SPECIAL FEE.  In order to induce WEC to enter into this Letter
of Intent and to compensate WEC for the time and expenses incurred in
connection with this Letter of Intent and the Transaction described in this
Letter of Intent and the losses suffered by WEC from foregone opportunities,
ESELCO shall pay $2,000,000 to WEC in immediately available funds promptly
after the occurrence of a Special Event.

          (f) NOTICES.  Any notices by ESELCO to WEC pursuant to this Section
5 of this Letter of Intent shall: (i) if made orally, be made to any one of
the following: Richard A. Abdoo at 414-221-2118 or David K. Porter at
414-221-2500 or Patrick M. Ryan at 414-277-5181; and (ii) if made in writing,
be made by telecopy to all of the following: Richard A. Abdoo at 414-221-2172
and David K. Porter at 414-221-2732 and Patrick M. Ryan at 414-271-3552.

<PAGE>

ESELCO, Inc.
Attention: William R. Gregory, President
 and Chief Executive Officer
March 24, 1997
Page 6

    6.  PUBLICITY.  The parties each agree that they will not make public
statements regarding the Transaction contemplated by this Letter of Intent
without first consulting the other party hereto in order that such public
statement may be jointly issued by the parties, except to the extent required
by law.

    7.  LETTER OF INTENT.  This letter is intended to be, and shall be
construed only as, a Letter of Intent and is not and shall not be a binding
agreement and the respective rights and obligations of WEC and ESELCO remain
to be defined in the definitive Merger Agreement, into which this Letter of
Intent and all prior discussions shall merge; provided that: (a) the
obligations of ESELCO under Sections 3(a), 3(c), 5 and 6 of this Letter of
Intent shall be binding upon ESELCO when this Letter of Intent shall be
executed by the parties; and (b) the obligations of WEC under Sections 3(c)
and 6 of this Letter of Intent shall be binding upon WEC when this Letter of
Intent shall be executed by the parties.

    8.  TERMINATION.  If this Letter of Intent is executed and delivered by
ESELCO, this Letter of Intent shall terminate: (a) in accordance with the
provisions of Section 5(d) of this Letter of Intent; or (b) unless the
definitive Merger Agreement on mutually acceptable terms is executed in
accordance with Section 4(b) of this Letter of Intent.

    9.  COUNTERPARTS.  This Letter of Intent may be executed in several
counterparts, each of which shall be deemed an original, but such
counterparts shall together constitute one agreement.

<PAGE>


ESELCO, Inc.
Attention: William R. Gregory, President
 and Chief Executive Officer
March 24, 1997
Page 7

    If the foregoing correctly sets forth your intent and agreements, kindly
signify by executing and returning the enclosed copy of this letter. I look
forward to your prompt response.

                                       Very truly yours,

                                       WISCONSIN ENERGY CORPORATION

                                       By: /s/ Richard A. Abdoo
                                           ---------------------------
                                           Richard A. Abdoo, Chairman
                                           of the Board, President and
                                           Chief Executive Officer




               The foregoing letter correctly sets forth our intent
concerning the Transaction and our agreement as to the terms of Sections
3(a), 3(c), 5 and 6.

               Dated:  March 24, 1997



                                  ESELCO, INC.


                                  By: /s/William R. Gregory
                                     ------------------------------
                                     William R. Gregory, President
                                     and Chief Executive Officer