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<table WIDTH="100%" >
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<td ALIGN=CENTER COLSPAN="2">
<hr></td>
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<tr VALIGN=TOP>
<td ALIGN=CENTER COLSPAN="2"><b><font face="Arial"><font color="#0000FF"><font
size=+2>SECURITIES
AND EXCHANGE COMMISSION</font></font></font></b></td>
</tr>

<tr VALIGN=TOP>
<td ALIGN=CENTER COLSPAN="2"><b><font face="Arial">Washington, D. C. 20549
</font></b></td>
</tr>

<tr VALIGN=TOP>
<td ALIGN=CENTER COLSPAN="2"><b><font face="Arial"><font color="#0000FF"><font
size=+2>FORM
10-Q</font></font></font></b></td>
</tr>

<tr VALIGN=TOP>
<td COLSPAN="2"></td>
</tr>

<tr VALIGN=TOP>
<td COLSPAN="2"><font face="Times New Roman">[X] QUARTERLY REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</font></td>
</tr>

<tr VALIGN=BOTTOM>
<td COLSPAN="2"><font face="Times New Roman">For the quarterly period ended:
</font><b><font face="Arial"><font color="#FF0000"><font size=+1>MARCH
31, 2000</font></font></font></b></td>
</tr>

<tr VALIGN=TOP>
<td COLSPAN="2">
<center><font face="Times New Roman">or</font></center>
</td>
</tr>

<tr VALIGN=TOP>
<td COLSPAN="2"><font face="Times New Roman">[ ] TRANSITION REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</font> For
the transition period from: ________________ to ________________</td>
</tr>

<tr VALIGN=TOP>
<td ALIGN=CENTER COLSPAN="2"></td>
</tr>

<tr VALIGN=TOP>
<td ALIGN=CENTER COLSPAN="2"><b><font face="Times New Roman">Commission
File Number 0-1125</font></b></td>
</tr>

<tr VALIGN=TOP>
<td COLSPAN="2"></td>
</tr>

<tr VALIGN=TOP>
<td ALIGN=CENTER COLSPAN="2"><b><font face="Arial"><font color="#008000">
<font size=+2>MADISON
GAS AND ELECTRIC COMPANY</font></font></font></b>
<br><font face="Times New Roman">(Exact name of registrant as specified
in its charter)</font></td>
</tr>

<tr VALIGN=TOP>
<td ALIGN=CENTER></td>

<td ALIGN=CENTER></td>
</tr>

<tr VALIGN=TOP>
<td ALIGN=CENTER><b><font face="Times New Roman"><font color="#008000">
<font size=+1>Wisconsin</font></font></font></b>
<br><font face="Times New Roman">(State or other jurisdiction of incorporation
or organization)</font></td>

<td ALIGN=CENTER><b><font face="Times New Roman"><font color="#008000">
<font size=+1>39-0444025</font></font></font></b>
<br><font face="Times New Roman">(IRS Employer Identification No.)</font></td>
</tr>

<tr VALIGN=TOP>
<td ALIGN=CENTER COLSPAN="2"></td>
</tr>

<tr VALIGN=TOP>
<td ALIGN=CENTER COLSPAN="2"><b><font face="Times New Roman">
<font color="#008000"><font size=+1>133
South Blair Street, Madison, Wisconsin 53703</font></font></font></b>
<br><font face="Times New Roman">(Address of principal executive offices
and ZIP code)</font></td>
</tr>

<tr VALIGN=TOP>
<td ALIGN=CENTER COLSPAN="2"></td>
</tr>

<tr VALIGN=TOP>
<td ALIGN=CENTER COLSPAN="2"><b><font face="Times New Roman">
<font color="#008000"><font size=+1>(608)
252-7000</font></font></font></b>
<br><font face="Times New Roman">(Registrant's telephone number including
area code)</font></td>
</tr>

<tr VALIGN=TOP>
<td ALIGN=CENTER COLSPAN="2"></td>
</tr>

<tr VALIGN=TOP>
<td ALIGN=CENTER COLSPAN="2"><b><font face="Arial"><font color="#0000FF">Common
Stock Outstanding at May 12, 2000: 16,309,274 Shares</font></font></b></td>
</tr>

<tr VALIGN=TOP>
<td COLSPAN="2"></td>
</tr>

<tr VALIGN=TOP>
<td COLSPAN="2"><font face="Times New Roman">Indicate by check mark whether
the registrant (1) has filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months, and (2) has been subject to such filing requirements for the
past 90 days. Yes [X] No [ ]</font></td>
</tr>
</TABLE>

<center>
<p><b><font face="Arial"><font color="#FF0000"><font size=+1>TABLE OF CONTENTS
</font></font></font></b></center>

<p><br>
<center><table WIDTH="52%" >
<tr VALIGN=TOP>
<td><b><font color="#008000">PART I - FINANCIAL INFORMATION</font></b></td>
</tr>

<tr VALIGN=TOP>
<td>Item 1 - Financial Statements and Notes</td>
</tr>

<tr VALIGN=TOP>
<td>- Condensed Consolidated Statements of Income</td>
</tr>

<tr VALIGN=TOP>
<td>- Condensed Consolidated Statements of Cash Flows</td>
</tr>

<tr VALIGN=TOP>
<td>- Condensed Consolidated Balance Sheets</td>
</tr>

<tr VALIGN=TOP>
<td>- Notes to Condensed Consolidated Financial Statements</td>
</tr>

<tr VALIGN=TOP>
<td>Item 2 - Management's Discussion and Analysis of Financial 
<p>Condition and Results of Operations</td>
</tr>

<tr VALIGN=TOP>
<td>- Liquidity and Capital Resources</td>
</tr>

<tr VALIGN=TOP>
<td>- Results of Operations</td>
</tr>

<tr VALIGN=TOP>
<td></td>
</tr>

<tr VALIGN=TOP>
<td><b><font color="#008000">PART II - OTHER INFORMATION</font></b></td>
</tr>

<tr VALIGN=TOP>
<td>Item 5 - Other Information</td>
</tr>

<tr VALIGN=TOP>
<td>Item 6(a) - Exhibits</td>
</tr>

<tr VALIGN=TOP>
<td>Item 6(b) - Reports on Form 8-K</td>
</tr>
</TABLE></center>

<p><b><font face="Arial"><font color="#FF0000"><font size=+1>PART I. FINANCIAL
INFORMATION</font></font></font></b>
<p><b><font face="Arial"><font color="#0000FF">Item 1. Financial Statements
</font></font></b>
<p><b><font color="#008000">CONDENSED CONSOLIDATED STATEMENTS OF INCOME</font>
(unaudited)</b>
<br> 
<table WIDTH="78%" >
<tr VALIGN=TOP>
<td><font face="Times New Roman">For the three months ended March 31</font></td>

<td ALIGN=RIGHT COLSPAN="2"></td>
</tr>

<tr VALIGN=TOP>
<td><i><font face="Times New Roman">(In thousands, except per-share amounts)
</font></i></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>
</tr>

<tr VALIGN=TOP>
<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">2000</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">1999</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td><b><font face="Times New Roman"><font color="#008000">Operating Revenues
</font></font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Electric </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">$46,904</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">$41,194</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Gas </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">37,639</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">38,340</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Total Operating Revenues </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">84,543</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">79,534</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>
</tr>

<tr VALIGN=TOP>
<td><b><font face="Times New Roman"><font color="#008000">Operating Expenses
</font></font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Fuel for electric generation </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">7,230</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">7,445</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Purchased power </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">4,614</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">2,423</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Natural gas purchased </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">22,799</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">22,847</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Other operations </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">16,742</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">15,928</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Maintenance </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">4,038</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">2,906</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Depreciation and amortization </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">8,544</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">8,348</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Other general taxes </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">2,603</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">2,366</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Income tax provision </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">5,566</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">5,495</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Total Operating Expenses </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">72,136</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">67,758</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>
</tr>

<tr VALIGN=TOP>
<td><b><font face="Times New Roman"><font color="#008000">Net Operating
Income</font></font></b></td>

<td ALIGN=RIGHT><font face="Times New Roman">12,407</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">11,776</font></td>
</tr>

<tr VALIGN=TOP>
<td></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">AFUDC - equity funds </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">110</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">68</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Other income, net </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">671</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">170</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Income Before Interest Expense 
</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">13,188</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">12,014</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>
</tr>

<tr VALIGN=TOP>
<td><b><font face="Times New Roman"><font color="#008000">Interest Expense
</font></font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Interest on long-term debt </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">2,873</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">2,876</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Other interest </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">262</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">117</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">AFUDC - borrowed funds </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">(57)</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">(35)</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Net Interest Expense </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">3,078</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">2,958</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>
</tr>

<tr VALIGN=TOP>
<td><b><font face="Times New Roman"><font color="#008000">Net Income</font>
</font></b></td>

<td ALIGN=RIGHT><font face="Times New Roman">$10,110</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">$ 9,056</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman"><b><font color="#008000">Earnings Per
Share of Common Stock</font></b> (basic & diluted) (Note 2) </font>
</td>

<td ALIGN=RIGHT><font face="Times New Roman">$0.62</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">$0.56</font>
<hr noshade></td>
</tr>
</TABLE>

<p><i><font face="Times New Roman">The accompanying notes are an integral
part of the above statements.</font></i>
<p><b><font color="#008000">CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
</font>
(unaudited)</b>
<br> 
<table WIDTH="79%" >
<tr VALIGN=TOP>
<td><font face="Times New Roman">For the three months ended March 31</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>
</tr>

<tr VALIGN=TOP>
<td><i><font face="Times New Roman">(In thousands)</font></i></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>
</tr>

<tr VALIGN=TOP>
<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">2000</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">1999</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td><b><font face="Times New Roman"><font color="#008000">Operating Activities
</font></font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Net income </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">$10,110</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">$ 9,056</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Items not affecting cash:</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Depreciation and amortization </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">8,544</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">8,348</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Deferred income taxes </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">(342)</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">1,122</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Amortization of nuclear fuel </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">643</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">660</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Amortization of investment tax credits 
</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">(181)</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">(184)</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">AFUDC - equity funds </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">(110)</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">(68)</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Other noncash items </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">(424)</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">-</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Changes in working capital, excluding
cash equivalents,</font>
<br><font face="Times New Roman">sinking funds, maturities, and short-term
debt:</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Decrease in current assets </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">9,960</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">9,152</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Increase in current liabilities 
</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">3,175</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">1,244</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Other noncurrent items, net </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">3,685</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">4,879</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Cash Provided by Operating Activities 
</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">35,060</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">34,209</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>
</tr>

<tr VALIGN=TOP>
<td><b><font face="Times New Roman"><font color="#008000">Investing Activities
</font></font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Additions to utility plant and nuclear
fuel </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">(13,109)</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">(6,520)</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">AFUDC - borrowed funds </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">(57)</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">(35)</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Increase in nuclear decommissioning fund 
</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">(2,594)</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">(2,332)</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Cash Used for Investing Activities 
</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">(15,760)</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">(8,887)</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>
</tr>

<tr VALIGN=TOP>
<td><b><font face="Times New Roman"><font color="#008000">Financing Activities
</font></font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Issuance of common stock </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">2,224</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">-</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Cash dividends on common stock 
</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">(5,316)</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">(5,239)</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Other decreases in First Mortgage Bonds 
</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">10</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">10</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Decrease in short-term debt </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">(15,750)</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">-</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Cash Used for Financing Activities 
</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">(18,832)</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">(5,229)</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>
</tr>

<tr VALIGN=TOP>
<td><b><font face="Times New Roman"><font color="#008000">Change in Cash
and Cash Equivalents</font></font></b></td>

<td ALIGN=RIGHT><font face="Times New Roman">468</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">20,093</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Cash and cash equivalents at beginning
of period </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">1,948</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">7,250</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Cash and cash equivalents at end of period
 </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">$ 2,416</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">$27,343</font>
<hr noshade></td>
</tr>
</TABLE>

<p><i>The accompanying notes are an integral part of the above statements.</i>
<p><b><font color="#008000">CONDENSED CONSOLIDATED BALANCE SHEETS</font>
(unaudited)</b>
<br> 
<table WIDTH="79%" >
<tr VALIGN=TOP>
<td><i>(In thousands)</i>
<center><b><font face="Times New Roman">ASSETS</font></b></center>
</td>

<td ALIGN=RIGHT>
<center><font face="Times New Roman">Mar. 31,</font>
<br><font face="Times New Roman">2000</font>
<hr noshade></center>
</td>

<td ALIGN=RIGHT>
<center><font face="Times New Roman">Dec. 31,</font>
<br><font face="Times New Roman">1999</font>
<hr noshade></center>
</td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman"><b><font color="#008000">Utility Plant
</font></b>(at
original cost, in service)</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Electric </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">$567,905</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">$554,392</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Gas </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">191,344</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">190,137</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Gross plant in service </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">759,249</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">744,529</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Less accumulated provision for depreciation
 </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">(494,443)</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">(484,428)</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Net plant in service </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">264,806</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">260,101</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Construction work in progress </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">26,986</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">31,134</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Nuclear decommissioning fund </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">101,922</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">97,056</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Nuclear fuel, net </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">8,169</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">6,534</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Total Utility Plant </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">401,883</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">394,825</font>

<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td><b><font face="Times New Roman"><font color="#008000">Other Property
and Investments</font></font></b></td>

<td ALIGN=RIGHT><font face="Times New Roman">3,607</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">3,591</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td><b><font face="Times New Roman"><font color="#008000">Current Assets</font>
</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Cash and cash equivalents </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">2,416</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">1,948</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Accounts receivable, less reserves of
$1,553 and $1,224 </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">28,177</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">27,913</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Unbilled revenue </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">11,919</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">13,167</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Materials and supplies, at lower of average
cost or market </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">7,018</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">6,149</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Fossil fuel, at lower of average cost
or market </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">3,670</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">4,061</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Stored natural gas, at lower of average
cost or market </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">2,164</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">10,039</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Prepaid taxes </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">5,088</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">6,802</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Other prepayments </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">1,198</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">1,063</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Total Current Assets </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">61,650</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">71,142</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td><b><font face="Times New Roman"><font color="#008000">Deferred Charges
</font></font></b></td>

<td ALIGN=RIGHT><font face="Times New Roman">24,602</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">25,952</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td><b><font face="Times New Roman"><font color="#008000">Total Assets</font>
</font></b></td>

<td ALIGN=RIGHT><font face="Times New Roman">$491,742</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">$495,510</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>
</tr>

<tr VALIGN=TOP>
<td>
<center><b><font face="Times New Roman">CAPITALIZATION AND LIABILITIES</font>
</b></center>
</td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>
</tr>

<tr VALIGN=TOP>
<td><b><font face="Times New Roman"><font color="#008000">Capitalization</font>
</font></b></td>

<td ALIGN=RIGHT><font face="Times New Roman">$341,313</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">$334,285</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td><b><font face="Times New Roman"><font color="#008000">Current Liabilities
</font></font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Long-term debt due within one year 
</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">11,200</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">11,200</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Short-term debt - commercial paper 
</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">-</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">15,750</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Accounts payable </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">15,868</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">19,553</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Accrued taxes </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">6,567</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">891</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Accrued interest </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">3,666</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">2,770</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Accrued nonregulated items </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">401</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">825</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Accrued payroll-related items </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">4,189</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">4,064</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Deferred gas costs </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">6,188</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">3,247</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Other </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">1,942</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">2,023</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Total Current Liabilities </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">50,021</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">60,323</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td><b><font face="Times New Roman"><font color="#008000">Other Credits</font>
</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Deferred income taxes </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">42,639</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">42,981</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Investment tax credit - deferred 
</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">9,018</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">9,199</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Regulatory liabilities </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">27,109</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">27,953</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Other deferred liabilities </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">21,642</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">20,769</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Total Other Credits </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">100,408</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">100,902</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Total Liabilities </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">150,429</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">161,225</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td><b><font face="Times New Roman"><font color="#008000">Total Capitalization
and Liabilities</font></font></b></td>

<td ALIGN=RIGHT><font face="Times New Roman">$491,742</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">$495,510</font>
<hr noshade></td>
</tr>
</TABLE>

<p><i>The accompanying notes are an integral part of the balance sheets.</i>
<p><b><font face="Times New Roman"><font color="#008000">NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</font> (unaudited)</font></b>
<center><b><i><font face="Times New Roman">March 31, 2000</font></i></b>
</center>

<p><font face="Times New Roman">MGE prepared these consolidated financial
statements, without audit (except for balance sheet information at December
31, 1999), pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant
to such rules and regulations. MGE believes the disclosures provided are
accurate and not misleading. MGE management believes it has made all normal
recurring adjustments needed to present fairly the financial statements
and notes in this report.</font>
<p><font face="Times New Roman">It is suggested that these consolidated
financial statements be read in conjunction with the financial statements
and the notes on pages 19 through 32 of MGE's 1999 Annual Report to Shareholders
and in MGE's 1999 Annual Report on Form 10-K.</font>
<p><font face="Times New Roman"><font color="#008000">1. Nuclear Decommissioning
</font></font></b>
<p><font face="Times New Roman">Nuclear decommissioning costs for the Kewaunee
Nuclear Power Plant (Kewaunee) are currently being accrued for full cost
recovery by the end of 2002. These costs are currently recovered from customers
in rates and are deposited in external trusts. MGE is presently funding
decommissioning costs at $8.1 million annually. These trusts are shown
on the balance sheet in the utility plant section. As of March 31, 2000,
these trusts totaled $101.9 million (pretax fair market value) and are
offset by an equal amount under accumulated provision for depreciation.</font>
<p><font face="Times New Roman">MGE's share of Kewaunee decommissioning
costs is estimated to be $89.3 million in current dollars based on a site-
specific study performed in 1992 using immediate dismantlement as the method of
decommissioning.</font>
<p><b><font face="Times New Roman"><font color="#008000">2. Per-share Amounts
</font></font></b>
<p><font face="Times New Roman">Earnings per share of common stock are
computed on the basis of the weighted average of the daily number of shares
outstanding. For the three months ended March 31, 2000 and 1999, there
were 16,199,669 and 16,079,718 shares outstanding, respectively.</font>
<p><font face="Times New Roman">Dividends declared and paid per share of
common stock for the three months ended March 31, 2000 and 1999, were $0.328
and $0.326, respectively.</font>
<p><b><font face="Times New Roman"><font color="#008000">3. Rate Matters</font>
</font></b>
<p>In January 2000, the Public Service Commission of Wisconsin (PSCW) approved
an electric rate increase of $9.7 million, or 5.5%. This electric rate
increase was needed during 2000 to cover higher fuel costs, increased backup
generator costs, and allow for repairs at Kewaunee. In MGE's previous rate
case, it was assumed ownership of Kewaunee would be transferred to Wisconsin
Public Service Corp. (WPSC) in the spring of 2000 when the steam generators
were scheduled to be replaced. A delay in manufacturing the steam generators
postponed replacement until the fall of 2001.<font face="Times New Roman">
MGE will recover its share of Kewaunee operating and maintenance costs
through rates. These new rates will remain in place until the next rate
case.</font>
<p><font face="Times New Roman">On April 17, 2000, MGE filed with the PSCW
a request to increase electric rates by 4.9% and increase natural gas rates
by 4.4%. The increase in electric rates is to cover rising fuel costs and
address increased system demands, while the increase in gas rates is to
cover costs for additional infrastructure improvements. The PSCW will conduct
their audit during the second quarter of this year. It is anticipated that
hearings will take place in the fall. An order is expected by the end of
the year.</font>
<p><b><font face="Times New Roman"><font color="#008000">4. Supplemental
Cash Flow Information</font></font></b>
<p>Cash payments for interest, net of amounts capitalized, and net cash
receipts from income tax refunds were as follows:
<br> 
<table WIDTH="68%" >
<tr VALIGN=TOP>
<td>Three months ended March 31 
<br><i>(In thousands)</i></td>

<td ALIGN=RIGHT> 
<div align=right>
<br>2000
<hr noshade></div>
</td>

<td ALIGN=RIGHT> 
<div align=right>
<br>1999
<hr noshade></div>
</td>
</tr>

<tr VALIGN=TOP>
<td>Interest paid, net of amounts capitalized </td>

<td ALIGN=RIGHT>$2,182</td>

<td ALIGN=RIGHT>$2,000</td>
</tr>

<tr VALIGN=TOP>
<td>Income taxes paid (received), net </td>

<td ALIGN=RIGHT>$1,451</td>

<td ALIGN=RIGHT>$952</td>
</tr>
</TABLE>

<p><b><font color="#008000">5. Commitments</font></b>
<p>In April 2000, MGE entered into a five-year contract to buy 50 MW of
firm capacity. The contract term begins May 1, 2002, and goes through April
30, 2007. MGE's obligation under this contract, including transmission
costs, averages approximately $5.4 million per year.
<p>MGE's total commitment for purchased power contracts (executed for capacity)
is estimated to be $7.3 million in 2000, $3.7 million in 2001, $9.2 million
in 2002, $9.3 million in 2003, and $5.4 million in 2004. Management expects
to recover these costs in future customer rates.
<p><b><font color="#008000">6. Weather Derivatives</font></b>
<p>MGE entered into two weather derivatives during the first quarter of
2000 to hedge a portion of its gas margin against abnormally warm weather.
MGE does not enter into weather derivatives for trading or speculative
purposes. MGE accounts for these weather derivatives in accordance with
EITF 99-2, "Accounting for Weather Derivatives." EITF 99-2 requires that
any entity that purchases a nonexchange-traded weather derivative in connection
with nontrading activities should amortize to expense any premium paid
and recognize any gains or losses currently in earnings. Amortization of
these premiums and any gains or losses on these weather derivatives are
recorded in other income. MGE is exposed to credit loss in the event of
nonperformance by counter parties to these weather derivatives. However,
MGE has strict credit guidelines and only enters into transactions with
companies that meet or exceed these guidelines. MGE considers the risk
of counter-party default to be minimal.
<p>MGE's two weather contracts were based on heating degree days (HDD).
The contract term for the first weather derivative covered January and
February of 2000. The agreement was a HDD swap or collar (two-directional
risk) with a HDD cap amount and a HDD floor amount. In the first quarter,
MGE realized after-tax income from this weather derivative of approximately
$0.1 million.
<p>MGE's second weather derivative agreement covers the periods of March
2000 and November 2000 through March 2001. The agreement is a HDD option
(one-directional risk) with a HDD floor amount. MGE is amortizing the premium
payment for this transaction based on budgeted HDD for each month of the
contract. No income was recognized for March on this weather derivative.
<p><b><font color="#008000">7. Gas Marketing Subsidiaries</font></b>
<p>During the first quarter of 2000, MGE received a favorable ruling on
some outstanding legal issues relating to its gas marketing subsidiaries,
resulting in a one-time after-tax benefit of $0.3 million, which was included
in other income.
<p><b><font color="#008000">8. Subsequent Events</font></b>
<p>On May 4, 2000, MGE issued $20 million of variable rate unsecured Medium
Term Notes, maturing on May 3, 2002. Interest on these notes will be paid
quarterly on the third Wednesday of March, June, September, and December
commencing on June 21, 2000. The proceeds from the issuance of these notes
were used to finance an 83 MW natural gas-fired combustion turbine, which
MGE is purchasing from WPSC.
<p><b><font face="Arial"><font color="#0000FF">Item 2. Management's Discussion
and Analysis of Financial Condition</font></font></b>
<br><b><font face="Arial"><font color="#0000FF">and Results of Operations</font>
</font></b>
<p><b><font face="Times New Roman"><font color="#FF0000">LIQUIDITY AND
CAPITAL RESOURCES</font></font></b>
<p><b><font face="Times New Roman"><font color="#008000">Cash Provided
by Operating Activities</font></font></b>
<p><font face="Times New Roman">Cash provided by operating activities increased
$0.1 million, or 2.5%, for the first quarter of 2000 due to an increase
in MGE's current liabilities.</font>
<p><b><font face="Times New Roman"><font color="#008000">Cash Used for
Investing Activities</font></font></b>
<p><font face="Times New Roman">Cash used for investing activities increased
by $6.9 million, or 77.3%. This is due to a $6.6 million increase in plant
additions over last year's first quarter. The majority of this increase
consists of customer backup generation. MGE also had a $0.3 million increase
in the nuclear decommissioning fund.</font>
<p><b><font face="Times New Roman"><font color="#008000">Cash Used for
Financing and Capital Resource Activities</font></font></b>
<p><font face="Times New Roman">During the first quarter of 2000, MGE used
$18.8 million of net cash for financing activities compared to a net use
of $5.2 million during the first quarter of 1999. This is primarily due
to retiring $15.8 million in short-term debt. MGE received $2.2 million
of net cash through issuing 126,000 new shares of common stock for its
Dividend Reinvestment and Direct Stock Purchase Plan (Investors Plus Plan).
</font>
<p><font face="Times New Roman">Bank lines of credit available to MGE as
of March 31, 2000, were $40 million.</font>
<p><font face="Times New Roman">MGE's capitalization ratios were as follows:
</font>
<br> 
<table WIDTH="75%" >
<tr VALIGN=TOP>
<td></td>

<td ALIGN=RIGHT>
<div align=right><font face="Times New Roman">Mar. 31, 2000</font>
<hr noshade></div>
</td>

<td ALIGN=RIGHT>
<div align=right><font face="Times New Roman">Dec. 31, 1999</font>
<hr noshade></div>
</td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Common shareholders' equity </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">54.7%</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">51.4%</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Short-term debt </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">-</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">4.4</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Long-term debt* </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">45.3 </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">44.2 </font></td>
</tr>

<tr VALIGN=TOP>
<td COLSPAN="3"><font face="Times New Roman">*Includes current maturities
and current sinking fund requirements.</font></td>
</tr>
</TABLE>

<p><b><font face="Times New Roman"><font color="#008000">Capital Requirements
</font></font></b>
<p><font face="Times New Roman">MGE's liquidity is primarily affected by
its construction requirements. During this year's first quarter, MGE's
plant additions totaled $7.8 million, up 19.8% from last year's first quarter.
It is anticipated that capital expenditures for projects in 2000 will be
$76.4 million. The major projects include:</font>
<p><font face="Times New Roman">- Construction of an 83 MW natural gas-fired
combustion turbine.</font>
<br><font face="Times New Roman">- MGE-owned backup generators located
at customers' sites (distributed generation).</font>
<br><font face="Times New Roman">- A gas pipeline project.</font>
<br><font face="Times New Roman">- Improvements at MGE's Blount plant.</font>
<br><font face="Times New Roman">- Nitrogen oxide emissions equipment at
the jointly owned Columbia Energy Center.</font>
<p><font face="Times New Roman">Other capital requirements during 2000
include a long-term debt maturity of $11.0 million due in November. MGE
uses its internally generated funds and short-term debt to satisfy a majority
of its capital requirements. Internally generated funds exceeded the funds
used for construction and nuclear fuel expenditures during this year's
first quarter. For larger capital investments, MGE will issue additional
long-term debt or common stock.</font>
<p><font face="Times New Roman">MGE's pretax interest coverage for the
twelve months ended March 31, 2000, was 3.97 times. Below is a table of
MGE's current credit ratings.</font>
<br> 
<table WIDTH="70%" >
<tr VALIGN=TOP>
<td ALIGN=CENTER></td>

<td ALIGN=CENTER><font face="Times New Roman">Standard & Poor's</font>
<hr noshade></td>

<td ALIGN=CENTER><font face="Times New Roman">Moody's</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">First Mortgage Bonds </font>
<br><font face="Times New Roman">Unsecured Medium Term Notes </font>
<br><font face="Times New Roman">Commercial Paper </font></td>

<td ALIGN=CENTER><font face="Times New Roman">AA</font>
<br><font face="Times New Roman">AA-</font>
<br><font face="Times New Roman">A1+</font></td>

<td ALIGN=CENTER><font face="Times New Roman">Aa2</font>
<br><font face="Times New Roman">Aa3</font>
<br><font face="Times New Roman">P1</font></td>
</tr>
</TABLE>

<p><b><font color="#FF0000"><font size=+1>RESULTS OF OPERATIONS</font></font>
</b>
<p><b><font color="#008000">Sales and Revenues</font></b>
<p><b><i>Electric</i></b>
<p>Retail sales increased 2.3% during the first three months ended March
31, 2000, due to customer growth of approximately 2%.
<br> 
<table WIDTH="68%" >
<tr VALIGN=TOP>
<td><i><font face="Times New Roman">Electric Sales (megawatt-hours)</font></i>
<br><font face="Times New Roman">Three months ended March 31</font></td>

<td ALIGN=RIGHT>2000
<hr noshade></td>

<td ALIGN=RIGHT>1999
<hr noshade></td>

<td ALIGN=RIGHT>% Change
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Residential </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">192,091</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">194,589</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">(1.3)</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Large commercial </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">256,632</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">254,357</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">0.9</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Small commercial </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">189,655</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">174,390</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">8.8</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Other </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">63,516</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">63,049</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">0.7</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Total Retail </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">701,895</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">686,385</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">2.3</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Sales for resale </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">93,283</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">37,696</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">147.5</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Total Sales </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">795,178</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">724,081</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">9.8</font></td>
</tr>
</TABLE>

<p><font face="Times New Roman">During the first three months of 2000,
electric operating revenue increased $5.7 million, or 13.9%. Revenues were
up due to a $1.4 million, or 190%, increase in sales for resale, other
ancillary service revenues such as wind energy and customer backup generation,
and a 5.5% rate increase that became effective on January 1, 2000 (see
Footnote 3, Rate Matters). </font>MGE entered into a contract in March
1999 to sell 30 MW of firm energy and capacity to Wisconsin Public Power
Inc.
<font face="Times New Roman">Electric margins (revenues less fuel
and purchased power) increased $3.9 million, or 12.4%, mainly as a result
of the 5.5% rate increase.</font>
<p><b><i>Gas</i></b>
<p>For the three months ended March 31, 2000, retail gas deliveries were
down 5.0%. The average temperature for this period was 30.5 degrees Fahrenheit,
which was 11.9% warmer than the 27.2 degrees Fahrenheit in 1999. Gas margins
(revenues less natural gas purchased) dropped $0.7 million, or 4.2%, primarily
because retail deliveries were down. MGE recognized approximately $0.2
million as its share of savings under the Gas Cost Incentive Mechanism,
which was implemented in November 1999.
<br> 
<table WIDTH="68%" >
<tr VALIGN=TOP>
<td><font face="Times New Roman"><i>Gas Deliveries (thousands of therms</i>)
</font>
<br><font face="Times New Roman">Three months ended March 31</font></td>

<td ALIGN=RIGHT>2000
<hr noshade></td>

<td ALIGN=RIGHT>1999
<hr noshade></td>

<td ALIGN=RIGHT>% Change
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Residential </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">36,966</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">39,368</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">(6.1)</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Commercial </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">29,290</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">30,347</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">(3.5)</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Total Retail </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">66,256</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">69,715</font></td>

<td ALIGN=RIGHT><font face="Times New Roman">(5.0)</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Transport </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">14,623</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">15,752</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">(7.2)</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Total Gas Deliveries </font></td>

<td ALIGN=RIGHT><font face="Times New Roman">80,879</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">85,467</font>
<hr noshade></td>

<td ALIGN=RIGHT><font face="Times New Roman">(5.4)</font></td>
</tr>
</TABLE>

<p><b><font color="#008000">Electric Fuel and Purchased Power</font></b>
<p>Fuel costs for electric generation decreased $0.2 million, or 2.9%,
during the first three months of 2000. During that period, the two units
at the Columbia Energy Center (Columbia) were out of service for scheduled
maintenance, at separate times, for a combined total of approximately eight
weeks. Overall fuel costs were down slightly. Less fuel was consumed at
Columbia because of the scheduled maintenance, but the cost per unit was
higher than last year.
<p>The cost of purchased power increased $2.2 million, or 90.4%, for the
first three months of 2000. This increase was primarily a result of the
contractual agreement where MGE agreed to purchase 60 MW of power from
Commonwealth Edison beginning in March of 1999.
<p><b><font color="#008000">Natural Gas</font></b>
<p>Natural gas costs remained stable for the three months ended March 31,
2000. The 5.0% decrease in retail deliveries was offset primarily by an
approximate 5.0% increase in the cost of natural gas.
<p><b><font face="Times New Roman"><font color="#008000">Other Electric
Operating Expenses</font></font></b>
<p><font face="Times New Roman">Operating costs increased $0.8 million,
or 7.3%, for the first three months of 2000. This is due primarily to an
increase in payroll and benefits of $0.2 million, higher transmission wheeling
expenses of $0.4 million, and general operating expenses of $0.2 million.
In addition, electric maintenance costs were up $1.2 million, or 46.9%,
due to scheduled outages for maintenance at Columbia. General taxes rose
$0.2 million, or 10.1%, due primarily to an increase in electric sales.</font>
<p><b><font face="Times New Roman"><font color="#008000">Income Taxes</font>
</font></b>
<p><font face="Times New Roman">MGE's effective tax rate of 37% for the
first three months of 2000 paralleled its 1999 effective tax rate of 36.9%.
</font>
<p><b><font color="#008000">Other Income</font></b>
<p>In the first three months of 2000, MGE received a favorable ruling on
some legal issues for its gas marketing subsidiaries resulting in a one-time
after-tax benefit of $0.3 million.
<p>Other income also includes the recognition of income from major items
such as a weather derivative agreement for $0.1 million and earnings on
the decommissioning trusts for $0.5 million.
<p><b><font color="#008000">Other Expenses</font></b>
<p>Total interest expense increased $0.1 million, or 4.7%, during the first
three months of 2000. This increase is due primarily to higher levels of
short-term debt in 2000 compared to the same period in 1999.
<p><b><font color="#008000">Year 2000</font></b>
<p>MGE did not experience any latent issues related to the Y2K problem
during the first quarter of 2000 and did not require additional spending.
MGE does not expect any further expenditures.
<p><b><font face="Arial"><font color="#FF0000"><font size=+1>PART II. OTHER
INFORMATION</font></font></font></b>
<p><b><font face="Times New Roman"><font color="#0000FF">ITEM 5 - OTHER
INFORMATION</font></font></b>
<p><b><font color="#008000">Forward-Looking Statements</font></b>
<p>This report, and certain other MGE public documents, contain forward-looking
statements that reflect management's current assumptions and estimates
of future performance and economic conditions, especially as they relate
to future revenues, expenses, financial resources and regulatory matters.
These forward-looking statements are made pursuant to the Safe Harbor provisions
of the Private Securities Litigation Reform Act of 1995. MGE cautions investors
that forward-looking statements are subject to known and unknown risks
and uncertainties that may cause MGE's actual results to differ materially
from those projected, expressed, or implied. Some of those risks and
uncertainties include:
<p>- Economic and market conditions in MGE's service territory.
<br>- Magnitude and timing of capital expenditures.
<br>- Regulatory environment (including restructuring the electric utility
industry in Wisconsin).
<br>- Availability and cost of power supplies.
<p><b><font color="#008000">Kewaunee Nuclear Power Plant</font></b>
<p>Kewaunee is jointly owned by MGE, Wisconsin Public Service Corp. (WPSC),
and Alliant Energy. Kewaunee has been operated since 1974 by WPSC. The
plant's license will expire in 2013.
<p>Kewaunee began its scheduled outage for refueling and maintenance on
April 22, 2000. Maintenance and refueling is expected to be completed and
the plant returned to service during the week of May 28, 2000. During the
prior refueling in the fall of 1998, the Nuclear Regulatory Commission
issued a Technical Specification that increased the number of tubes allowed
to remain in service. The Technical Specification has now been amended
to allow these tubes to remain in service through the current refueling
cycle. Although no delays are expected at this time, the outage could be
extended if any unexpected maintenance is necessary.
<p>Information regarding the replacement of two steam generators at Kewaunee,
WPSC's agreement to buy MGE's 17.8% share of Kewaunee, and MGE's contracting
with WPSC to build and operate an 83 MW natural gas-fired combustion turbine
is included in the registrant's Annual Report on Form 10-K for the year
ended December 31, 1999.
<p><b><font face="Times New Roman"><font color="#0000FF">ITEM 6(a) - EXHIBITS
</font></font></b>
<p><b>Exhibit 4</b>
<br>Indenture of Mortgage and Deed of Trust between MGE and Firstar Trust
Company, as Trustee (and supplements). Reference was provided in MGE's
1999 Annual Report on Form 10-K (Commission File No. 0-1125).
<p><b>Exhibit 12</b>
<br>Ratio of Earnings to Fixed Charges
<p><b>Exhibit 27</b>
<br>Appendix E to Item 601(c) of Regulation S-K: Public Utility Companies
Financial Data Schedule UT.
<p><b><font face="Times New Roman"><font color="#0000FF">ITEM 6(b) REPORTS
ON FORM 8-K</font></font></b>
<p>No reports on Form 8-K were filed during the quarter for which this
report is filed.
<p><b><font face="Arial"><font color="#FF0000"><font size=+1>SIGNATURES</font>
</font></font></b>
<p>Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
<table WIDTH="79%" >
<tr VALIGN=TOP>
<td></td>

<td><b><font face="Times New Roman">MADISON GAS AND ELECTRIC COMPANY</font></b>
<br><b><font face="Times New Roman">(Registrant)</font></b></td>
</tr>

<tr VALIGN=TOP>
<td>
<br><font face="Times New Roman">Date: May 12, 2000</font></td>

<td>
<br><font face="Times New Roman">/s/ Gary J. Wolter</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td></td>

<td><font face="Times New Roman">President and Chief Executive Officer</font>
<br><font face="Times New Roman">(Duly Authorized Officer)</font></td>
</tr>

<tr VALIGN=TOP>
<td>
<br><font face="Times New Roman">Date: May 12, 2000</font></td>

<td>
<br><font face="Times New Roman">/s/ Terry A. Hanson</font>
<hr noshade></td>
</tr>

<tr VALIGN=TOP>
<td></td>

<td><font face="Times New Roman">Vice President and Chief Financial Officer
</font>
<br><font face="Times New Roman">(Chief Financial and Accounting Officer)
</font></td>
</tr>
</TABLE>

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