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EXHIBIT 4.2



[FORM OF INTEREST CALCULATION AGENCY AGREEMENT]



INTEREST CALCULATION AGENCY AGREEMENT


     INTEREST CALCULATION AGENCY AGREEMENT between MGE ENERGY, INC. (the
“Issuer”) and                      (“                    ”) dated as of                                , 2003.


PRELIMINARY STATEMENT


     1.     The Issuer proposes to issue and sell its Medium-Term Notes due from
Nine Months to 30 Years from Date of Issue (the “Notes”) from time to time
under, and pursuant to, the terms of an Indenture (the “Indenture”), dated as
of                                , 2003 between the Company and                     , as Trustee (in
such capacity, the “Trustee”). Capitalized terms not otherwise defined herein
shall have the meanings assigned to them in the Indenture and if not defined
therein then as defined in the Prospectus and Prospectus Supplement relating to
the Notes.


     2.     The Issuer desires to appoint an agent of the Issuer to calculate the
base rates applicable to those Notes on which interest is to accrue, at any
time, at a variable or floating rate (“Floating Rate Notes”), determined by
references to the Commercial Paper Rate, LIBOR, the Prime Rate, the Treasury
Rate or other interest rate basis as is set forth in a pricing supplement
(collectively, the “Base Rates”) as are specified and described in the Floating
Rate Notes.


     NOW, THEREFORE, the Issuer and hereby agree as follows:


     SECTION 1. APPOINTMENT OF CALCULATION AGENT. The Issuer hereby appoints
[                    ] as Calculation Agent (in such capacity, the “Calculation Agent”)
of the Issuer with respect to any Floating Rate Notes to be issued by the
Issuer under and pursuant to the terms of the Indenture, and the Calculation
Agent hereby accepts its obligations as set forth in this Agreement upon the
terms and conditions set forth herein.


     SECTION 2. CALCULATION OF BASE RATES. The calculation date (the
“Calculation Date”) for each applicable Interest Determination Date for any
Note shall be the earlier of (i) the tenth calendar day after such Interest
Determination Date or, if any such day is not a Business Day, the next
succeeding Business Day and (ii) the Business Day preceding the applicable
Interest Payment Date or date of Maturity, as the case may be. The Calculation
Agent shall notify the Issuer and the Trustee of the applicable interest rate
on or prior to each such Calculation Date.


     If at any time the Calculation Agent is not also acting as Trustee under
the Indenture, the Issuer shall, upon the issuance of each Floating Rate Note
having a different Base Rate or different Interest Determination Dates than the
Base Rate or Interest Determination Dates for any prior Floating Rate Note,
notify such Calculation Agent of such Interest Determination Dates and the
applicable interest rate base(s) or formula for such Floating Rate Note.


 






 


     SECTION 3. NEW BASE RATES. If the Issuer proposes to issue Floating Rate
Notes whose interest rate will be determined on a basis or formula not referred
to above (a “New Base Rate”), the Issuer shall give a description of such New
Base Rate to the Calculation Agent. The Calculation Agent shall determine if
it is able and willing to calculate the New Base Rate and upon its agreement in
writing to do so the term “Base Rate’’ shall be deemed to include the New Base
Rate. If the Calculation Agent notifies the Issuer that it is not able or
willing to calculate the New Base Rate, or that it is only willing to do so on
the basis of an increase of its fees not acceptable to the Issuer, the
Calculation Agent shall have no responsibility with respect to such New Base
Rate and the Issuer shall appoint a different calculation agent to determine
the New Base Rate.


     SECTION 4. FEES AND EXPENSES. The Calculation Agent shall be entitled to
such compensation for its services under this Agreement as may be agreed upon
with the Issuer, and the Issuer shall pay such compensation and shall reimburse
the Calculation Agent for all reasonable expenses, disbursements and advances
incurred or made by the Calculation Agent in connection with the services
rendered by it under this Agreement, including reasonable legal fees and
expenses, upon receiving an accounting therefor from the Calculation Agent.


     SECTION 5. RIGHTS AND LIABILITIES OF CALCULATION AGENT. The Calculation
Agent shall incur no liability for, or in respect of, any action taken, omitted
to be taken or suffered by it in reliance upon any Floating Rate Note,
certificate, affidavit, instruction, notice, request, direction, order,
statement or other paper, document or communication reasonably believed by it
to be genuine. Any certificate, affidavit, instruction, notice, request,
direction, order, statement or other communication from the Issuer made or
given by it and sent, delivered or directed to the Calculation Agent under,
pursuant to or as permitted by any provision of this Agreement shall be
sufficient for purposes of this Agreement if such communication is in writing
and signed by any officer of the Issuer. The Calculation Agent may consult
with counsel satisfactory to it and the opinion of such counsel shall
constitute full and complete authorization and protection of the Calculation
Agent with respect to any action taken, omitted to be taken or suffered by it
hereunder in good faith and in accordance with and in reliance upon the opinion
of such counsel. In acting under this Agreement, the Calculation Agent (in its
capacity as such) does not assume any obligation towards, or any relationship
of agency or trust for or with the holders of the Notes.


     SECTION 6. RIGHT OF CALCULATION AGENT TO OWN FLOATING RATE NOTES. The
Calculation Agent may act as Trustee under the Indenture and it and its
officers, employees and shareholders may become owners of, or acquire any
interests in, Floating Rate Notes, with the same rights as if the Calculation
Agent were not the Calculation Agent, and it may engage in, or have an interest
in, any financial or other transaction with the Issuer as if the Calculation
Agent were not the Calculation Agent.


     SECTION 7. DUTIES OF CALCULATION AGENT. The Calculation Agent shall be
obligated only to perform such duties as are specifically set forth herein and
no


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other duties or obligations on the part of the Calculation Agent, in its
capacity as such, shall be implied by this Agreement.


     SECTION 8. TERMINATION, RESIGNATION OR REMOVAL OF CALCULATION AGENT. The
Calculation Agent may at any time terminate this Agreement by giving no less
than 90 days written notice to the Issuer unless the Issuer consents in writing
to a shorter time. Upon receipt of notice of termination by the Calculation
Agent. the Issuer agrees promptly to appoint a successor Calculation Agent.
The Issuer may terminate this Agreement at any time by giving written notice to
the Calculation Agent and specifying the date when the termination shall become
effective; provided, however, that no termination by the Calculation Agent or
by the Issuer shall become effective prior to the date of the appointment by
the Issuer, as provided in Section 9 hereof, of a successor Calculation Agent
and the acceptance of such appointment by such successor Calculation Agent. If
an instrument of acceptance by a successor Calculation Agent shall not have
been delivered to the Calculation Agent within 30 days after the giving of such
notice of resignation, the resigning Calculation Agent may petition any court
of competent jurisdiction for the appointment of a successor Calculation Agent.
Upon termination by either party pursuant to the provisions of this section,
the Calculation Agent shall be entitled to the payment of any compensation owed
to it by the Issuer hereunder and to the reimbursement of reasonable expenses,
disbursements and advances incurred or made by the Calculation Agent in
connection with the services rendered by it hereunder, as provided by Section 4
hereof.


     SECTION 9. APPOINTMENT OF SUCCESSOR CALCULATION AGENT. Any successor
Calculation Agent appointed by the Issuer or by a court following termination
of this Agreement pursuant to the provisions of Section 8 hereof shall execute
and deliver to the Calculation Agent and to the Issuer an instrument accepting
such appointment, and thereupon such successor Calculation Agent shall, without
any further act or instrument become vested with all the rights, immunities,
duties and obligations of the Calculation Agent, with like effect as if
originally named as Calculation Agent hereunder, and the resigning Calculation
Agent shall thereupon be obligated to transfer and deliver, and such successor
Calculation Agent shall be entitled to receive and accept, copies of any
available records maintained by the resigning Calculation Agent in connection
with the performance of its obligations hereunder.


     SECTION 10. INDEMNIFICATION. The Issuer shall indemnity and hold harmless
the Calculation Agent, its officers and employees from and against all actions,
claims, damages, liabilities, losses and expenses (including reasonable legal
fees and expenses) relating to or arising out of actions or omissions in any
capacity hereunder, except actions, claims, damages, liabilities, losses and
expenses relating to or arising from the negligence or willful misconduct of
the Calculation Agent, its officers or employees. The Calculation Agent shall
indemnify and hold harmless the Issuer, its officers and employees from and
against all actions, claims, damages, liabilities, losses and expenses
(including reasonable legal fees and expenses) relating to or arising from the
negligence or willful misconduct of the Calculation Agent, its officers or
employees. This Section 10 shall survive the payment in full of all
obligations under the Notes, whether by redemption, repayment or otherwise.


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     SECTION 11. MERGER, CONSOLIDATION OR SALE OF BUSINESS BY CALCULATION
AGENT. Any corporation into which the Calculation Agent may be merged,
converted or consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Calculation Agent may be a party, or
any corporation to which the Calculation Agent may sell or otherwise transfer
all or substantially all of its corporate trust business, shall, to the extent
permitted by applicable law, become the Calculation Agent under this Agreement
without the execution of any document or any further act by the parties hereto.


     SECTION 12. NOTICES. Any notice or other communication given hereunder
shall be delivered in person, sent by letter, facsimile or communicated by
telephone (subject, in the case of communication by telephone, to written
confirmation dispatched within 24 hours) to the addresses given below or such
other address as the party to receive such notice may have previously
specified:


     To the Issuer:



	 	 	 
	 	 	
MGE Energy, Inc.
	 	 	
133 South Blair Street
	 	 	
P.O. Box 1231
	 	 	
Madison, Wisconsin 53701-1231
	 	 	
Telephone: (608) 252-7000
	 	 	
Facsimile: (608)       –      
	 	 	 
	 	 	
To the Calculation Agent:
	 	 	 
	 	 	 
	 	 	
Attention:
	 	 	
Facsimile:
	 	 	 
	 	 	
To the Trustee:
	 	 	 
	 	 	
Attention:
	 	 	
Facsimile:



Any notice hereunder given by letter or telecopy shall be deemed to have been
received when it would have been received in the ordinary course of post or
transmission, as the case may be.


     SECTION 13. BENEFIT OF AGREEMENT. Except as provided herein, this
Agreement is solely for the benefit of the parties hereto and their successors
and assigns and no other person shall acquire or have any rights under or by
virtue hereof.


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     SECTION 14. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.


     SECTION 15. AMENDMENT. This Agreement shall be amended only in a writing
signed by both parties hereto.


     SECTION 16. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Agreement.


     IN WITNESS WHEREOF, this Agreement has been entered into the day and year
first above written.



	 	 	 	 	 
	 	 	MGE ENERGY, INC.
	  	 	 	 	 
	  	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	  	 	 	 	 
	  	 	 	 	 
	 	 	[CALCULATION AGENT]
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Title:	 	 




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