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<table WIDTH="100%" >
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<td ALIGN=CENTER COLSPAN="2"><b><font size=+2>SECURITIES AND EXCHANGE COMMISSION
</font></b></td>
</tr>

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

<tr VALIGN=TOP>
<td ALIGN=CENTER COLSPAN="2"><b><font size=+2>FORM 10-Q</font></b></td>
</tr>

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

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

<tr VALIGN=BOTTOM>
<td COLSPAN="2">For the quarterly period ended: <b><font size=+2>SEPTEMBER
30, 1999</font></b></td>
</tr>

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

<tr VALIGN=TOP>
<td COLSPAN="2">[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 
<p>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"></td>
</tr>

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

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

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

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

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

<tr VALIGN=TOP>
<td ALIGN=CENTER><b><font size=+1>Wisconsin</font></b>
<br>(State or other jurisdiction of incorporation or organization)</td>

<td ALIGN=CENTER><b><font size=+1>39-0444025</font></b>
<br>(IRS Employer Identification No.)</td>
</tr>

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

<tr VALIGN=TOP>
<td ALIGN=CENTER COLSPAN="2"><b>133 South Blair Street, Madison, Wisconsin
53703</b>
<br>(Address of principal executive offices and ZIP code)</td>
</tr>

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

<tr VALIGN=TOP>
<td ALIGN=CENTER COLSPAN="2"><b>(608) 252-7000</b>
<br>(Registrant's telephone number including area code)</td>
</tr>

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

<tr VALIGN=TOP>
<td ALIGN=CENTER COLSPAN="2"><b>Common Stock Outstanding at November 12,
1999: 16,079,718 Shares</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>

<p><b><font face="Arial">TABLE OF CONTENTS</font></b>
<br> 
<table WIDTH="100%" >
<tr VALIGN=TOP>
<td><b>PART 1 - FINANCIAL INFORMATION</b></td>

<td></td>
</tr>

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

<td></td>
</tr>

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

<td>3</td>
</tr>

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

<td>4</td>
</tr>

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

<td>5</td>
</tr>

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

<td>6</td>
</tr>

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

<td>7-9</td>
</tr>

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

<td></td>
</tr>

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

<td>10</td>
</tr>

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

<td>13</td>
</tr>

<tr VALIGN=TOP>
<td><b>PART II - OTHER INFORMATION</b></td>

<td></td>
</tr>

<tr VALIGN=TOP>
<td>Item 1 - Legal Proceedings</td>

<td>16</td>
</tr>

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

<td>16</td>
</tr>

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

<td>17</td>
</tr>

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

<td>17</td>
</tr>

<tr VALIGN=TOP>
<td><b>Exhibits:</b></td>

<td></td>
</tr>

<tr VALIGN=TOP>
<td>- Exhibit 12 - Ratio of Earnings to Fixed Charges</td>

<td>19</td>
</tr>

<tr VALIGN=TOP>
<td>- Exhibit 27 - Financial Data Schedule UT</td>

<td>20</td>
</tr>
</TABLE>

<p><b><font face="Arial">PART I. FINANCIAL INFORMATION</font></b><b><font face="Arial"></font></b>
<p><b><font face="Arial">ITEM 1. FINANCIAL STATEMENTS</font></b>
<p><b>CONSOLIDATED STATEMENTS OF INCOME AND RETAINED INCOME</b>
<br><b><i>Thousands of Dollars (Unaudited)</i></b>
<br> 
<table BORDER WIDTH="100%" >
<tr VALIGN=TOP>
<td></td>

<td ALIGN=CENTER COLSPAN="3"><font face="Times New Roman">Three Months
Ended</font></td>

<td ALIGN=CENTER></td>

<td ALIGN=CENTER COLSPAN="3"><font face="Times New Roman">Nine Months Ended</font></td>
</tr>

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

<td ALIGN=CENTER COLSPAN="3"><font face="Times New Roman">September 30,</font></td>

<td ALIGN=CENTER></td>

<td ALIGN=CENTER COLSPAN="3"><font face="Times New Roman">September 30,</font></td>
</tr>

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

<td ALIGN=CENTER><b><font face="Times New Roman">1999</font></b></td>

<td ALIGN=CENTER></td>

<td ALIGN=CENTER><font face="Times New Roman">1998</font></td>

<td ALIGN=CENTER></td>

<td ALIGN=CENTER><b><font face="Times New Roman">1999</font></b></td>

<td ALIGN=CENTER></td>

<td ALIGN=CENTER><font face="Times New Roman">1998</font></td>
</tr>

<tr VALIGN=TOP>
<td>
<center><b><font face="Times New Roman">STATEMENTS OF INCOME</font></b></center>
</td>

<td ALIGN=RIGHT></td>

<td></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

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

<tr VALIGN=TOP>
<td><b>Operating Revenues:</b></td>

<td ALIGN=RIGHT></td>

<td></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

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

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

<td ALIGN=RIGHT><b><font face="Times New Roman">$55,439</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">$50,458</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">$141,042</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">$131,295</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">9,036</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">7,321</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">60,129</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">56,161</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">64,475</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">57,779</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">201,171</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">187,456</font></td>
</tr>

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

<td ALIGN=RIGHT></td>

<td></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

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

<tr VALIGN=TOP>
<td>Fuel for electric generation</td>

<td ALIGN=RIGHT><b><font face="Times New Roman">9,957</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">10,219</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">24,907</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">24,890</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">8,933</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">2,950</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">18,305</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">8,292</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">3,653</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">2,454</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">32,596</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">31,380</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">16,621</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">16,372</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">49,363</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">48,598</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">3,132</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">3,475</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">10,446</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">10,529</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">8,715</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">8,112</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">26,233</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">24,648</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">2,295</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">2,309</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">7,012</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">7,000</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">3,043</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">3,367</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">8,848</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">8,803</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">56,349</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">49,258</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">177,710</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">164,140</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">8,126</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">8,521</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">23,461</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">23,316</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Allowance for funds used during construction
- equity funds</font></td>

<td ALIGN=RIGHT><b>66</b></td>

<td></td>

<td ALIGN=RIGHT>25</td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b>218</b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT>79</td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">820</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">(47)</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">2,785</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">1,183</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">9,012</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">8,499</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">26,464</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">24,578</font></td>
</tr>

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

<td ALIGN=RIGHT></td>

<td></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

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

<tr VALIGN=TOP>
<td>Interest on long-term debt</td>

<td ALIGN=RIGHT><b><font face="Times New Roman">2,877</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">2,508</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">8,626</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">7,356</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">140</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">166</font></td>

<td ALIGN=RIGHT></td>

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

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">558</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Allowance for funds used during construction
- borrowed funds</font></td>

<td ALIGN=RIGHT><b>(34)</b></td>

<td></td>

<td ALIGN=RIGHT>(13)</td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b>(112)</b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT>(42)</td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">2,983</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">2,661</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">8,899</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">7,872</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">$ 6,029</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">$ 5,838</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">$ 17,565</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">$ 16,706</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman"><b>Earnings per share of common stock
(basic and diluted)</b> (Note 3)</font></td>

<td ALIGN=RIGHT><b>$0.38</b></td>

<td></td>

<td ALIGN=RIGHT>$0.36</td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b>$1.09</b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT>$1.04</td>
</tr>

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

<td ALIGN=RIGHT></td>

<td></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

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

<tr VALIGN=TOP>
<td ALIGN=CENTER><b><font face="Times New Roman">STATEMENTS OF RETAINED
INCOME</font></b></td>

<td ALIGN=RIGHT></td>

<td></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

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

<tr VALIGN=TOP>
<td><b><font face="Times New Roman">Balance - beginning of period</font></b></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">$54,694</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">$52,755</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">$53,637</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">$52,285</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">6,029</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">5,838</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">17,565</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">16,706</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Cash dividends on common stock (Note 3)</font></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">(5,279)</font></b></td>

<td></td>

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

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">(15,758)</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">(15,637)</font></td>
</tr>

<tr VALIGN=TOP>
<td><b><font face="Times New Roman">Balance - end of period</font></b></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">$55,444</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">$53,354</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">$55,444</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">$53,354</font></td>
</tr>

<tr VALIGN=TOP>
<td COLSPAN="8"><i><font face="Times New Roman">The accompanying notes
are an integral part of the above statements.</font></i></td>
</tr>
</TABLE>

<p><b>CONSOLIDATED STATEMENTS OF CASH FLOWS</b>
<br><b><i>Thousands of Dollars (Unaudited)</i></b>
<br> 
<table BORDER WIDTH="100%" >
<tr VALIGN=TOP>
<td></td>

<td ALIGN=CENTER COLSPAN="3"><font face="Times New Roman">Three Months
Ended</font></td>

<td ALIGN=CENTER></td>

<td ALIGN=CENTER COLSPAN="3"><font face="Times New Roman">Nine Months Ended</font></td>
</tr>

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

<td ALIGN=CENTER COLSPAN="3"><font face="Times New Roman">September 30,</font></td>

<td ALIGN=CENTER></td>

<td ALIGN=CENTER COLSPAN="3"><font face="Times New Roman">September 30,</font></td>
</tr>

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

<td ALIGN=CENTER><b><font face="Times New Roman">1999</font></b></td>

<td></td>

<td ALIGN=CENTER><font face="Times New Roman">1998</font></td>

<td ALIGN=CENTER></td>

<td ALIGN=CENTER><b><font face="Times New Roman">1999</font></b></td>

<td ALIGN=CENTER></td>

<td ALIGN=CENTER><font face="Times New Roman">1998</font></td>
</tr>

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

<td ALIGN=RIGHT></td>

<td></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

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

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

<td ALIGN=RIGHT><b><font face="Times New Roman">6,029</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">$5,838</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">17,565</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">$16,706</font></td>
</tr>

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

<td ALIGN=RIGHT></td>

<td></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

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

<tr VALIGN=TOP>
<td>Depreciation and amortization</td>

<td ALIGN=RIGHT><b><font face="Times New Roman">8,715</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">8,112</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">26,233</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">24,648</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">(895)</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">(759)</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">(559)</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">(3,145)</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">662</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">680</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">1,982</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">1,983</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">(185)</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">(187)</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">(554)</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">(560)</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Allowance for funds used during construction
- equity funds</font></td>

<td ALIGN=RIGHT><b>(66)</b></td>

<td></td>

<td ALIGN=RIGHT>(25)</td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b>(218)</b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT>(79)</td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Changes in working capital excluding cash,
sinking funds, maturities, and interim loans:</font></td>

<td ALIGN=RIGHT></td>

<td></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

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

<tr VALIGN=TOP>
<td>(Increase)/decrease in current assets</td>

<td ALIGN=RIGHT><b><font face="Times New Roman">(5,694)</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">(592)</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">7,603</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">14,790</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">3,293</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">(1,144)</font></td>

<td ALIGN=RIGHT></td>

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

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">1,906</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">1,195</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">92</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">6,136</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">8,171</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">13,054</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">12,015</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">60,958</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">64,420</font></td>
</tr>

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

<td ALIGN=RIGHT></td>

<td></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

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

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

<td ALIGN=RIGHT></td>

<td></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

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

<tr VALIGN=TOP>
<td>Additions to utility plant and nuclear fuel</td>

<td ALIGN=RIGHT><b><font face="Times New Roman">(13,244)</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">(8,764)</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">(38,286)</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">(23,124)</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Allowance for funds used during construction
- borrowed funds</font></td>

<td ALIGN=RIGHT><b>(34)</b></td>

<td></td>

<td ALIGN=RIGHT>(13)</td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b>(112)</b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT>(42)</td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">(2,795)</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">(2,234)</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">(8,529)</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">(7,210)</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">(16,073)</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">(11,011)</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">(46,927)</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">(30,376)</font></td>
</tr>

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

<td ALIGN=RIGHT></td>

<td></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

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

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

<td ALIGN=RIGHT></td>

<td></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

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

<tr VALIGN=TOP>
<td>Cash dividends on common stock</td>

<td ALIGN=RIGHT><b><font face="Times New Roman">(5,279)</font></b></td>

<td></td>

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

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">(15,758)</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">(15,637)</font></td>
</tr>

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

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

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">30,000</font></td>

<td ALIGN=RIGHT></td>

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

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">30,000</font></td>
</tr>

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

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

<td></td>

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

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">29</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">29</font></td>
</tr>

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

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

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">(11,750)</font></td>

<td ALIGN=RIGHT></td>

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

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">(33,500)</font></td>
</tr>

<tr VALIGN=TOP>
<td><i><font face="Times New Roman">Cash (used for)/provided by Financing
Activities</font></i></td>

<td ALIGN=RIGHT><b>(5,269)</b></td>

<td></td>

<td ALIGN=RIGHT>13,021</td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b>(15,729)</b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT>(19,108)</td>
</tr>

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

<td ALIGN=RIGHT></td>

<td></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT></td>

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

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

<td ALIGN=RIGHT><b><font face="Times New Roman">(8,288)</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">14,025</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">(1,698)</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">14,936</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><b><font face="Times New Roman">13,840</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">3,019</font></td>

<td ALIGN=RIGHT></td>

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

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">2,108</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">$5,552</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">$17,044</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">5,552</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">$17,044</font></td>
</tr>

<tr VALIGN=TOP>
<td COLSPAN="8"><i>The accompanying notes are an integral part of the above
statements.</i></td>
</tr>
</TABLE>

<p><b>CONSOLIDATED BALANCE SHEETS</b>
<br><b><i>Thousands of Dollars (Unaudited)</i></b>
<br> 
<table BORDER WIDTH="100%" >
<tr VALIGN=TOP>
<td><b>ASSETS</b></td>

<td ALIGN=CENTER><b><font face="Times New Roman">Sept. 30,</font></b>
<br><b><font face="Times New Roman">1999</font></b></td>

<td ALIGN=CENTER></td>

<td ALIGN=CENTER><font face="Times New Roman">Dec. 31,</font>
<br><font face="Times New Roman">1998</font></td>
</tr>

<tr VALIGN=TOP>
<td><b><font face="Times New Roman">Utility Plant, at Original Cost, in
Service:</font></b></td>

<td ALIGN=RIGHT></td>

<td></td>

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

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

<td ALIGN=RIGHT><b><font face="Times New Roman">$550,434</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">$520,753</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">188,130</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">184,868</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">738,564</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">705,621</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">(469,916)</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">(446,984)</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">268,648</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">258,637</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">22,903</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">21,490</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">87,126</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">79,089</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">6,683</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">8,086</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">385,360</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">367,302</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">6,367</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">6,700</font></td>
</tr>

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

<td ALIGN=RIGHT></td>

<td></td>

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

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

<td ALIGN=RIGHT><b><font face="Times New Roman">5,552</font></b></td>

<td></td>

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

<tr VALIGN=TOP>
<td><font face="Times New Roman">Accounts receivable, less reserves of
$1,323 and $1,281, respectively</font></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">24,101</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">26,812</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">8,428</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">13,113</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">6,557</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">5,936</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">3,256</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">3,509</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">10,688</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">9,709</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">4,947</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">6,573</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">1,102</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">1,030</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">64,631</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">73,932</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">22,782</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">18,331</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">$479,140</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">$466,265</font></td>
</tr>

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

<td ALIGN=RIGHT></td>

<td></td>

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

<tr VALIGN=TOP>
<td><b><font face="Times New Roman">Capitalization (see statement)</font></b></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">$343,872</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">$342,036</font></td>
</tr>

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

<td ALIGN=RIGHT></td>

<td></td>

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

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

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

<td></td>

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

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

<td ALIGN=RIGHT><b><font face="Times New Roman">17,694</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">15,364</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">2,505</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">549</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">3,669</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">2,734</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">1,080</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">2,771</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">9,725</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">4,696</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">34,873</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">26,314</font></td>
</tr>

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

<td ALIGN=RIGHT></td>

<td></td>

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

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

<td ALIGN=RIGHT><b><font face="Times New Roman">43,784</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">44,343</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Regulatory liability - SFAS 109</font></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">23,179</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">23,745</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">9,384</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">9,938</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">24,048</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">19,889</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">100,395</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">97,915</font></td>
</tr>

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

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

<td></td>

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

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

<td ALIGN=RIGHT><b><font face="Times New Roman">135,268</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">124,229</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">$479,140</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">$466,265</font></td>
</tr>

<tr VALIGN=TOP>
<td COLSPAN="4"><i>The accompanying notes are an integral part of the balance
sheets.</i></td>
</tr>
</TABLE>

<p><b>CONSOLIDATED STATEMENTS OF CAPITALIZATION</b>
<br><b><i>Thousands of Dollars (Unaudited)</i></b>
<br> 
<table BORDER WIDTH="100%" >
<tr VALIGN=TOP>
<td></td>

<td ALIGN=CENTER><b><font face="Times New Roman">Sept. 30,</font></b>
<br><b><font face="Times New Roman">1999</font></b></td>

<td ALIGN=CENTER></td>

<td ALIGN=CENTER><font face="Times New Roman">Dec. 31,</font>
<br><font face="Times New Roman">1998</font></td>
</tr>

<tr VALIGN=TOP>
<td><b><font face="Times New Roman">Common Shareholders' Equity:</font></b></td>

<td ALIGN=RIGHT></td>

<td></td>

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

<tr VALIGN=TOP>
<td><font face="Times New Roman">Common stock - par value $1 per share:</font></td>

<td ALIGN=RIGHT></td>

<td></td>

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

<tr VALIGN=TOP>
<td><font face="Times New Roman">Authorized 50,000,000 shares</font></td>

<td ALIGN=RIGHT></td>

<td></td>

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

<tr VALIGN=TOP>
<td><font face="Times New Roman">Outstanding 16,079,718 shares</font></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">$16,080</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">$16,080</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Amount received in excess of par value</font></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">112,558</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">112,558</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">55,444</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">53,637</font></td>
</tr>

<tr VALIGN=TOP>
<td><i><font face="Times New Roman">Total Common Shareholders' Equity</font></i></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">184,082</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">182,275</font></td>
</tr>

<tr VALIGN=TOP>
<td><b><font face="Times New Roman">First Mortgage Bonds:</font></b></td>

<td ALIGN=RIGHT></td>

<td></td>

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

<tr VALIGN=TOP>
<td><font face="Times New Roman">6-1/2%, 2006 series:</font></td>

<td ALIGN=RIGHT></td>

<td></td>

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

<tr VALIGN=TOP>
<td><font face="Times New Roman">Pollution Control Revenue Bonds</font></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">6,475</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">6,475</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">8.50%, 2022 series</font></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">40,000</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">40,000</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">6.75%, 2027A series:</font></td>

<td ALIGN=RIGHT></td>

<td></td>

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

<tr VALIGN=TOP>
<td><font face="Times New Roman">Industrial Development Revenue Bonds</font></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">28,000</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">28,000</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">6.70%, 2027B series:</font></td>

<td ALIGN=RIGHT></td>

<td></td>

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

<tr VALIGN=TOP>
<td><font face="Times New Roman">Industrial Development Revenue Bonds</font></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">19,300</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">19,300</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">7.70%, 2028 series</font></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">21,200</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">21,200</font></td>
</tr>

<tr VALIGN=TOP>
<td><i><font face="Times New Roman">First Mortgage Bonds Outstanding</font></i></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">114,975</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">114,975</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Unamortized discount and premium on bonds,
net</font></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">(985)</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">(1,014)</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">(200)</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">(200)</font></td>
</tr>

<tr VALIGN=TOP>
<td><i><font face="Times New Roman">Total First Mortgage Bonds</font></i></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">113,790</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">113,761</font></td>
</tr>

<tr VALIGN=TOP>
<td><b><font face="Times New Roman">Other Long-Term Debt:</font></b></td>

<td ALIGN=RIGHT></td>

<td></td>

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

<tr VALIGN=TOP>
<td><font face="Times New Roman">6.01%, due 2000</font></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">11,000</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">11,000</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">6.91%, due 2004</font></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">5,000</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">5,000</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">6.02%, due 2008</font></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">30,000</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">30,000</font></td>
</tr>

<tr VALIGN=TOP>
<td><i><font face="Times New Roman">Total Long-Term Debt</font></i></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">159,790</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">159,761</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">$343,872</font></b></td>

<td></td>

<td ALIGN=RIGHT><font face="Times New Roman">$342,036</font></td>
</tr>

<tr VALIGN=TOP>
<td COLSPAN="4"><i>The accompanying notes are an integral part of the above
statements.</i></td>
</tr>
</TABLE>

<p><b><font face="Arial">                          
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)</font></b>
<br><b><font face="Arial">                                      
                           
September 30, 1999</font></b>
<p><font face="Times New Roman">Madison Gas and Electric Company (MGE)
prepared these consolidated financial statements, without audit (except
for balance sheet information at December 31, 1998), 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 18 through 27 of MGE's 1998 Annual Report to Shareholders
and in MGE's 1998 Annual Report on Form 10-K.</font>
<p><b><font face="Times New Roman">1. Summary of Significant Accounting
Policies</font></b>
<p><font face="Times New Roman">The accounting and financial policies related
to the following items have been described in the 1998 Annual Report to
Shareholders. The information is not repeated here because it has not changed
materially at this time.</font>
<p><font face="Times New Roman">a. General</font>
<br><font face="Times New Roman">b. Utility plant</font>
<br><font face="Times New Roman">c. Nuclear fuel</font>
<br><font face="Times New Roman">d. Joint plant ownership</font>
<br><font face="Times New Roman">e. Depreciation</font>
<br><font face="Times New Roman">f. Income taxes</font>
<br><font face="Times New Roman">g. Pension plans</font>
<br><font face="Times New Roman">h. Fair value of financial instruments</font>
<br><font face="Times New Roman">i. Capitalization matters: First Mortgage
Bonds and other long-term debt; preferred stock; and notes</font>
<br><font face="Times New Roman">   payable to banks, commercial
paper, and lines of credit</font>
<br><font face="Times New Roman">j. Segments of business</font>
<br><font face="Times New Roman">k. Regulatory assets and liabilities</font>
<p><b><font face="Times New Roman">2. Nuclear Decommissioning</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 September 30,
1999, these trusts totaled $87 million (pretax fair market value) and are
offset by an equal amount under accumulated provision for depreciation.</font>
<p><font face="Times New Roman">Decommissioning costs are recovered through
depreciation expense, exclusive of earnings on the trusts. Net earnings
on the trusts are included in other income. MGE assumed a 5.6% long-term,
after-tax earnings on these trusts.</font>
<p><font face="Times New Roman">MGE's share of Kewaunee decommissioning
costs is estimated to be $86.8 million (in current after-tax dollars) based
on a site-specific study performed in 1992 using immediate dismantlement
as the method of decommissioning. Based on the agreement between Wisconsin
Public Service Corp. and MGE regarding the sale of Kewaunee, MGE's decommissioning
liability has been limited to the current fund balances plus all decommissioning
contributions through 2002. Decommissioning costs are assumed to inflate
at an average rate of 6.0%. Physical decommissioning is expected to occur
from 2014 to 2021, with additional costs being incurred from 2022 to 2039
for storing spent fuel at the site.</font>
<p><b><font face="Times New Roman">3. Per-share Amounts</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 and nine months ended September 30, 1999 and
1998, there were 16,079,718 shares outstanding.</font>
<p><font face="Times New Roman">Dividends declared and paid per share of
common stock for the periods ended September 30, 1999 and 1998 were, respectively,
for the three months $0.328 and $0.326; for the nine months $0.980 and
$0.972.</font>
<p><b><font face="Times New Roman">4. Rate Matters</font></b>
<p><font face="Times New Roman">On July 16, 1999, MGE filed an application
with the </font>Public Service Commission of Wisconsin (PSCW) for a temporary
increase in electric rates. The rate increase was filed to cover, in part,
higher purchased power costs caused by a longer-than-expected outage at
the Columbia Energy Center (Columbia) which MGE jointly owns with Wisconsin
Power and Light Company (Alliant Energy) and Wisconsin Public Service Corp.
(WPS Resources). The PSCW approved a 3.6% average retail rate increase
in late August. This surcharge will end when the new order issued in the
reopening of Docket 3270-UR-109, MGE's current rate order, becomes effective.
This is expected to occur January 2000.
<p>MGE also filed on July 16, 1999, a request to reopen Docket 3270-UR-109.
The request is seeking a 5.7% electric rate increase effective next year
to cover higher costs including unexpected repair costs at Kewaunee and
higher purchased power costs. MGE was scheduled to sell its ownership interest
in Kewaunee in May of 2000 when the remaining owners planned to replace
the plan<font face="Times New Roman">t</font>'s steam generators. Due to
manufacturing delays, the generator replacement and simultaneous ownership
change is now scheduled for the fall of 2001. Kewaunee must have a maintenance
outage and temporary steam generator repairs early next year in order to
continue operating until the steam generator replacement begins. Hearings
for this request were held on October 25, 1999. PSCW staff is recommending
an increase of 5.53%. An order will likely be issued by the end of the
year.
<p><b><font face="Times New Roman">5. Supplemental Cash Flow Information</font></b>
<p><font face="Times New Roman">For purposes of the Consolidated Statements
of Cash Flows, MGE considers cash equivalents to be those investments that
are highly liquid with maturity dates of less than three months.</font>
<p>Cash payments for interest, net of amounts capitalized, and net cash
receipts from income tax refunds were as follows:
<br> 
<table WIDTH="100%" >
<tr VALIGN=TOP>
<td></td>

<td ALIGN=CENTER COLSPAN="3">Three Months Ended 
<br>September 30,</td>

<td ALIGN=CENTER></td>

<td ALIGN=CENTER COLSPAN="3">Nine Months Ended
<br>September 30,</td>
</tr>

<tr VALIGN=TOP>
<td><i>(Thousands of dollars)</i></td>

<td ALIGN=RIGHT><b><u>1999</u></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><u>1998</u></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><u>1999</u></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><u>1998</u></td>
</tr>

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

<td ALIGN=RIGHT><b>$2,100</b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT>$1,214</td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b>$7,963</b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT>$6,454</td>
</tr>

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

<td ALIGN=RIGHT><b>$4,501</b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT>4,204</td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b>$10,105</b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT>$10,412</td>
</tr>
</TABLE>

<p><b>6. Commitments</b>
<p>Beginning in March 1999, MGE entered into an agreement with Commonwealth
Edison to purchase 60 MW of firm capacity and energy for approximately
$10.2 million in 1999. This amount includes MGE's costs to secure firm
transmission (approximately $0.5 million) to deliver firm capacity and
energy to the MGE system. Also beginning in March 1999, MGE entered into
an agreement to sell 30 of the 60 MW to Wisconsin Public Power Inc. for
approximately $4.8 million in 1999, plus any taxes applicable to the sale.
<p>MGE has several other firm purchased power contracts for capacity. Purchase
obligations on these contracts are $3.5 million in 1999.
<p><b>7. Gas Marketing Subsidiaries</b>
<p>In December 1996, MGE wrote down its investment in both Great Lakes
Energy Corp. and American Energy Management, Inc. (AEM), to reflect current
value. As of September 30, 1999, a $1.1 million liability remains to account
for the remaining contingencies related to this write-down.
<p>MGE reversed outstanding contingencies related to the expiration of
lighting warranties and outstanding accounts payable for AEM. These amounts
(after tax) totaled $0.3 million for the third quarter. In the second quarter
of 1999, MGE also recognized certain one-time benefits in the amount of
$0.6 million (after tax) on some outstanding legal and tax issues related
to the gas marketing subsidiaries.
<p><b><font face="Arial">ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS</font></b>
<p><b><i><font face="Times New Roman">LIQUIDITY AND CAPITAL RESOURCES</font></i></b>
<p><b><font face="Times New Roman">Capital Requirements</font></b>
<p><font face="Times New Roman">MGE's liquidity is primarily affected by
its construction requirements. During the third quarter of this year, MGE's
plant additions totaled $13.2 million, an increase of $4.5 million over
last year. For the first nine months of 1999, MGE had capital expenditures
of $38 million. It is anticipated that total capital expenditures will
be $62.5 million in 1999. Major projects include:</font>
<p><font face="Times New Roman">-A wind farm;</font>
<br><font face="Times New Roman">-Improvements at MGE's Blount Generating
Station;</font>
<br><font face="Times New Roman">-MGE-owned backup generators, located
at customers' sites, to help meet emergency energy needs.</font>
<p><b><font face="Times New Roman">Cash Provided by Operating Activities</font></b>
<p><font face="Times New Roman">Cash provided by operating activities increased
$1.0 million, or 8.6%, for the third quarter of 1999 compared to the third
quarter of 1998. This is primarily due to a $1.2 million increase in other
regulatory liabilities found in "Other noncurrent items."</font>
<p><font face="Times New Roman">Cash provided by operating activities decreased
$3.5 million, or 5.4%, for the first nine months of 1999 compared to the
first nine months in 1998. This is primarily due to a decrease in net working
capital for the nine months ended September 30, 1999, compared to the same
time period last year.</font>
<p><b><font face="Times New Roman">Cash Used for Investing Activities</font></b>
<p><font face="Times New Roman">Cash used for investing activities increased
by $5.1 million for the third quarter of 1999 and $16.6 million for the
first nine months of 1999. This is due to increased plant additions (as
described above), particularly MGE's wind project.</font>
<p><b><font face="Times New Roman">Cash Used for Financing and Capital
Resource Activities</font></b>
<p><font face="Times New Roman">Cash used for financing activities increased
$18.3 million compared to the third quarter of 1998. In the third quarter
of 1998, $30.0 million of Medium Term Notes were issued compared to this
year's third quarter where no debt was issued.</font>
<p><font face="Times New Roman">For the first nine months of the year,
cash used for financing activities decreased $3.4 million compared to last
year. MGE used $33.5 million of cash to decrease short-term debt during
the first nine months of 1998.</font>
<p><font face="Times New Roman">Bank lines of credit available to MGE as
of September 30, 1999, were $26.5 million.</font>
<p><font face="Times New Roman">MGE's capitalization ratios were as follows:</font>
<br> 
<table WIDTH="100%" >
<tr VALIGN=TOP>
<td></td>

<td ALIGN=RIGHT><b><u><font face="Times New Roman">Sept. 30, 1999</font></u></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><u>Dec. 31, 1998</u></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">53.5%</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">53.3%</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">46.5%</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">46.7%</font></td>
</tr>

<tr VALIGN=TOP>
<td COLSPAN="4"><font face="Times New Roman">*Includes current maturities
and current sinking fund</font></td>
</tr>
</TABLE>

<p>MGE's First Mortgage Bonds are currently rated Aa2 by Moody's Investors
Service, Inc., and AA by Standard & Poor's Corporation. MGE's Medium-Term
Notes are currently rated Aa3 by Moody's and AA- by Standard & Poor's.
MGE's dealer-issued commercial paper carries the highest ratings assigned
by Moody's and Standard & Poor's.
<p><b>Year 2000 Readiness Disclosure</b>
<p>As of September 30, 1999, MGE's operating and business systems and equipment
are Year 2000 (Y2K) ready. Independent consultants have reviewed MGE's
guidelines, project methodology, and project organization to become Y2K
ready. In May, MGE received the highest readiness rating given after its
Y2K readiness program was audited by a team of industry experts sponsored
by the North American Electric Reliability Council (NERC)<font face="Times New Roman">
and the Department of Energy.</font>
<p><font face="Times New Roman">The Y2K issue is the result of computer
programs that were written using two digits rather than four to define
the applicable year. A failure due to the Y2K issue could cause disruptions
in normal business operations.</font>
<p><font face="Times New Roman">MGE has not experienced any significant
Y2K failure to date. However, the most conscientious efforts cannot guarantee
that every problem will be found and corrected prior to January 1, 2000.
MGE is taking the necessary steps to identify and reduce risks associated
with the Y2K issue. MGE has developed contingency plans for its critical
operating and business systems.</font>
<p><font face="Times New Roman">MGE estimates its total Y2K costs to be
$4.3 million. MGE has spent $4.0 million to date on Y2K. These costs are
being expensed as incurred and funded through operating cash flow.</font>
<p><font face="Times New Roman">MGE's Y2K project team, created in 1997,
developed a work plan that includes the following phases:</font>
<br> 
<table WIDTH="100%" >
<tr VALIGN=TOP>
<td><b><i><font face="Times New Roman">Percentage Complete as of 9/30/99</font></i></b></td>

<td ALIGN=CENTER></td>

<td ALIGN=CENTER><b><u><font face="Times New Roman">Information Systems</font></u></b></td>

<td ALIGN=CENTER></td>

<td ALIGN=CENTER><b><u><font face="Times New Roman">Embedded Systems</font></u></b></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Project organization and awareness</font></td>

<td ALIGN=CENTER></td>

<td ALIGN=CENTER><font face="Times New Roman">100%</font></td>

<td ALIGN=CENTER></td>

<td ALIGN=CENTER><font face="Times New Roman">100%</font></td>
</tr>

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

<td ALIGN=CENTER></td>

<td ALIGN=CENTER><font face="Times New Roman">100%</font></td>

<td ALIGN=CENTER></td>

<td ALIGN=CENTER><font face="Times New Roman">100%</font></td>
</tr>

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

<td ALIGN=CENTER></td>

<td ALIGN=CENTER><font face="Times New Roman">100%</font></td>

<td ALIGN=CENTER></td>

<td ALIGN=CENTER><font face="Times New Roman">100%</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Verification and testing</font></td>

<td ALIGN=CENTER></td>

<td ALIGN=CENTER><font face="Times New Roman">100%</font></td>

<td ALIGN=CENTER></td>

<td ALIGN=CENTER><font face="Times New Roman">100%</font></td>
</tr>

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

<td ALIGN=CENTER></td>

<td ALIGN=CENTER><font face="Times New Roman">100%</font></td>

<td ALIGN=CENTER></td>

<td ALIGN=CENTER><font face="Times New Roman">100%</font></td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Contingency planning and preparedness</font></td>

<td ALIGN=CENTER></td>

<td ALIGN=CENTER><font face="Times New Roman">99%</font></td>

<td ALIGN=CENTER></td>

<td ALIGN=CENTER><font face="Times New Roman">99%</font></td>
</tr>
</TABLE>

<p><font face="Times New Roman">MGE has identified its major suppliers
and assessed their Y2K readiness through surveys and interviews. Our two
most critical vendors are operators of our jointly owned power plants.
Kewaunee is following the Y2K readiness guidelines and methods that have
been established by the Nuclear Energy Institute. An evaluation of Kewaunee's
Y2K readiness plans, processes, and progress was made by an independent
consultant. The Kewaunee operator reported to the Nuclear Regulatory Commission
that the plant is Y2K ready. Columbia is also Y2K ready according to the
company operating the plant.</font>
<p><font face="Times New Roman">Y2K operational contingency preparedness
is nearing completion. Through the Mid-America Interconnected Network,
MGE is participating in NERC's industry-wide Y2K preparedness and contingency
planning efforts </font>and has developed contingency plans that follow
guidelines issued by NERC. These plans and associated drills are coordinated
with other electric and gas utilities in the region as well as local emergency
management agencies.
<p>MGE participated in NERC's nationwide drills on April 9 ,1999, and September
8 and 9, 1999. During the drills, MGE successfully exercised backup communications
for monitoring the gas and electric systems. MGE field crews manually checked
pressure and flow readings at natural gas facilities and monitored power
system conditions at electric substations. Two-way radios were used to
communicate between the field locations and MGE's Systems Operation Center
(SOC) control room. Staff at MGE's SOC recorded the field reports on paper
and then entered the data on an off-line backup computer. During the September
8 and 9 drill, MGE also exercised contingency plans and responses to simulated
problem scenarios. The drills did not affect gas and electric service to
MGE customers.
<p>MGE participates in quarterly assessments of the gas utility industry
coordinated by the American Gas Association to communicate Y2K readiness
of the industry.
<p>MGE subsidiaries are being assessed for Y2K issues, but those systems
are not critical and therefore will not have a material effect on normal
operations.
<p><b><i>RESULTS OF OPERATIONS</i></b>
<p><b>Electric Sales and Revenues</b>
<p>Electric retail sales increased approximately 2% (see table) for the
three-month and nine-month periods ending September 30, 1999, over the
comparable periods last year.
<br> 
<table WIDTH="100%" >
<tr VALIGN=TOP>
<td ROWSPAN="2"><i><font face="Times New Roman">Electric Sales</font></i>
<br><i><font face="Times New Roman">(megawatt-hours)</font></i></td>

<td ALIGN=RIGHT COLSPAN="5"><font face="Times New Roman">Three Months Ended
Sept. 30,</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT COLSPAN="5"><font face="Times New Roman">Nine Months Ended
Sept. 30,</font></td>
</tr>

<tr VALIGN=TOP>
<td ALIGN=RIGHT><b><u><font face="Times New Roman">1999</font></u></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><u><font face="Times New Roman">1998</font></u></td>

<td ALIGN=RIGHT></td>

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

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><u><font face="Times New Roman">1999</font></u></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><u><font face="Times New Roman">1998</font></u></td>

<td ALIGN=RIGHT></td>

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

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

<td ALIGN=RIGHT><font face="Times New Roman">228,034</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">225,111</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">1.3%</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">589,170</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">576,949</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">2.1%</font></td>
</tr>

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

<td ALIGN=RIGHT><font face="Times New Roman">296,119</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">284,679</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">4.0</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">817,975</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">785,294</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">4.2</font></td>
</tr>

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

<td ALIGN=RIGHT><font face="Times New Roman">208,675</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">205,451</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">1.6</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">579,513</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">571,571</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">1.4</font></td>
</tr>

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

<td ALIGN=RIGHT><font face="Times New Roman">87,159</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">88,369</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">(1.4)</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">225,093</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">238,036</font></td>

<td ALIGN=RIGHT></td>

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

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

<td ALIGN=RIGHT><font face="Times New Roman">819,987</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">803,610</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">2.0</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">2,211,751</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">2,171,850</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">1.8</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">85,268</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">14,908</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">472.0</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">194,534</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">63,710</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">205.3</font></td>
</tr>

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

<td ALIGN=RIGHT><font face="Times New Roman">905,255</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">818,518</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">10.6</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">2,406,285</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">2,235,560</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">7.6</font></td>
</tr>
</TABLE>

<p>Electric operating revenues increased $5.0 million, or 9.9%, for the
third quarter of 1999 versus the same period last year. Third quarter electric
operating revenues were up due to an increase in electric sales, in particular
sales for resale, and a 5.1% electric rate increase effective in January
1999. Sales for resale increased approximately $1.8 million for this year's
third quarter compared to last year's third quarter. Beginning in March
of this year, MGE entered into an agreement to sell 30 MW of firm capacity
to Wisconsin Public Power Inc. (see Footnote 6).
<p>Electric operating revenues increased $9.7 million, or 7.4%, for the
nine months of 1999 compared to last year. Revenues were up due primarily
to an electric rate increase, higher sales for resale, and also higher
retail sales.
<p><b>Gas Sales and Revenues</b>
<p>For the three months ended September 30, 1999, gas revenues increased
$1.7 million, or 23.4% while retail deliveries increased 3.2% compared
to the same period last year (see table).<font face="Times New Roman">
Higher unit gas costs in the third quarter, also contributed to the increase
in gas revenues, as these costs were passed on to customers through the
Purchased Gas Adjustment Clause.</font>
<p>For the nine months ended September 30, 1999, retail gas deliveries
increased 5.5% (see table) due to colder temperatures primarily in the
first quarter, adding $4.0 million in revenue, a 7.1% increase over 1998.
<br> 
<table WIDTH="100%" >
<tr VALIGN=TOP>
<td ROWSPAN="2"><i><font face="Times New Roman">Gas Deliveries</font></i>
<br><i><font face="Times New Roman">(thousands of therms)</font></i></td>

<td ALIGN=RIGHT COLSPAN="5"><font face="Times New Roman">Three Months Ended
Sept. 30,</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT COLSPAN="5"><font face="Times New Roman">Nine Months Ended
Sept. 30,</font></td>
</tr>

<tr VALIGN=TOP>
<td ALIGN=RIGHT><b><u><font face="Times New Roman">1999</font></u></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><u><font face="Times New Roman">1998</font></u></td>

<td ALIGN=RIGHT></td>

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

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><u><font face="Times New Roman">1999</font></u></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><u><font face="Times New Roman">1998</font></u></td>

<td ALIGN=RIGHT></td>

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

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

<td ALIGN=RIGHT><b><font face="Times New Roman">5,728</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">5,378</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">6.5%</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">55,807</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">51,321</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">8.7%</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">6,998</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">6,957</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">0.6</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">46,385</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">45,575</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">1.8</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">12,726</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">12,335</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">3.2</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">102,192</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">96,896</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">5.5</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">8,537</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">10,327</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">(17.3)</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">33,205</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">29,094</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">14.1</font></td>
</tr>

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

<td ALIGN=RIGHT><b><font face="Times New Roman">21,263</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">22,662</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">(6.2)</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><b><font face="Times New Roman">135,397</font></b></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">125,990</font></td>

<td ALIGN=RIGHT></td>

<td ALIGN=RIGHT><font face="Times New Roman">7.5</font></td>
</tr>
</TABLE>

<p><b>Electric Fuel and Natural Gas Costs</b>
<p>Fuel costs for electric generation and purchased power increased $5.7
million, or 43.4%, for the third quarter compared to the same period in
1998 due to higher purchased power costs incurred from the effects of the
extremely hot weather conditions in July and unexpected outages at Columbia
and the Blount Generating Station. MGE set a record for peak demand on
July 23 at 634 MW. As a result, MGE's electric margin (revenues less fuel
and purchased power costs) decreased $0.7 million, or 2.0%, versus the
third quarter of 1998.
<p>Fuel costs for electric generation and purchased power increased $10.0
million, or 30.2%, for the first nine months of 1999 compared to the same
period last year. The Columbia plant was down at various times during the
first nine months of 1999 requiring MGE to generate more power at its Blount
Generating Station at a higher fuel cost and incurring higher purchased
power costs during peak demands. This contributed to the adverse effect
on margin. Also, MGE entered into a purchased power contract with Commonwealth
Edison to purchase 60 MW of capacity (see Footnote 6).
<p>Natural gas costs for the third quarter of 1999 increased $1.2 million,
or 48.9%, compared to the same period a year ago. This increase was primarily
due to a higher unit cost of approximately $0.09 per therm. Natural gas
costs were up $1.2 million, or 3.9% for the first nine months compared
to the same period last year due to a 5.5% increase in total retail gas
deliveries. MGE's gas margin for the nine-month period (revenues less purchased
gas costs), increased $2.8 million, or 11.1%, primarily due to the rise
in retail deliveries and a less than 1% rate increase which became effective
in January 1999.
<p><b>Other Operating Expenses</b>
<p>Income taxes for the three months ended September 30, 1999, decreased
$0.7 million, or 6.0%, due to a decrease in pretax operating income for
the same time period.
<p>Operations and maintenance expense, including depreciation and general
taxes, increased $0.5 million, or 1.6%, for the third quarter of 1999,
and $2.3 million, or 2.5%, for the nine months ended September 30, 1999,
compared to the same periods a year ago. The major contributors to these
higher costs are increased depreciation due to new capital projects going
into service during the first nine months of this year compared to last
year and the outages experienced at Columbia.
<p><b>Other Income</b>
<p>Other income increased $0.9 million for the third quarter of 1999 and
$1.6 million for the nine months ended September 30, 1999, compared to
the same periods a year ago. MGE recognized some one-time benefits of $0.9
million (after tax) during the first nine months of 1999 from several issues
related to its gas marketing subsidiaries (see Footnote 7). Also, income
from the decommissioning fund increased $0.6 million for the first nine
months of 1999 compared to the same period last year.
<p><b>Interest Expense</b>
<p>Long-term interest expense increased $0.4 million, or 14.7%, for the
third quarter 1999, and $1.3 million, or 17.3%, for the first nine months
of 1999. In September 1998, MGE issued $30 million in Medium Term Notes
at 6.02%, maturing in 2008, to cover increased capital spending and reduce
short-term debt.
<p><b>AFUDC</b>
<p>Total AFUDC increased $0.2 million for the first nine months of 1999
compared to the same 1998 period. This is due to the increased capital
spending that has occurred this year.
<p><b><font face="Arial">PART II. OTHER INFORMATION</font></b>
<p><b><font face="Times New Roman">ITEM 1 - LEGAL PROCEEDINGS</font></b>
<p><font face="Times New Roman">In May 1999, MGE demanded arbitration against
Alliant Energy Corp., parent company of Wisconsin Power and Light Company
(WPL), for the way it is operating and maintaining the Columbia Energy
Center. MGE owns 22% of Columbia.</font>
<p><font face="Times New Roman">MGE claims that since WPL merged with two
Iowa utilities last year to form Alliant Energy, it has changed the way
it operates and maintains the plant--violating operating agreements. MGE
wants Alliant/WPL to relinquish its ownership in the Columbia plant to
MGE.</font>
<p><b><font face="Times New Roman">ITEM 5 - OTHER INFORMATION</font></b>
<p><b>Executive Changes</b>
<p>On November 2, 1999, David C. Mebane announced he will retire as Chief
Executive Officer and President on January 31, 2000. Mr. Mebane will continue
serving as Chairman of the Board. His successor will be Gary J. Wolter,
Senior Vice President - Administration and Secretary. Mr. Wolter will become
President and Chief Executive Officer and a member of the Board of Directors
effective February 1, 2000.
<p>Other Senior Executive changes that become effective February 1, 2000,
include:
<p>Mark C. Williamson, Executive Vice President and Chief Strategic Officer
<br>Ronald L. Semmann, Executive Vice President
<br>Lynn K. Hobbie, Senior Vice President
<p><b>Forward-Looking Statements</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.
<p>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 the following:
<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; and
<br>-MGE's ability to become Year 2000 ready at a reasonable cost.
<p><b><font face="Times New Roman">ITEM 6(a) - EXHIBITS</font></b>
<p>Exhibit 4
<p>Indenture of Mortgage and Deed of Trust between MGE and Firstar Trust
Company, as Trustee (and supplements) reference was provided in MGE's 1998
Annual Report on Form 10-K (Commission File No. 0-1125).
<p>Exhibit 12
<p>Ratio of Earnings to Fixed Charges
<p>Exhibit 27
<p>Appendix E to Item 601(c) of Regulation S-K: Public Utility Companies
Financial Data Schedule UT.
<br> 
<table WIDTH="100%" >
<tr VALIGN=TOP>
<td ALIGN=CENTER><b><u>Exhibit</u></b></td>

<td ALIGN=CENTER></td>

<td ALIGN=CENTER><b><u>Page</u></b></td>
</tr>

<tr VALIGN=TOP>
<td ALIGN=CENTER>Exhibit 4 </td>

<td></td>

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

<tr VALIGN=TOP>
<td ALIGN=CENTER>Exhibit 12</td>

<td></td>

<td ALIGN=CENTER>19</td>
</tr>

<tr VALIGN=TOP>
<td ALIGN=CENTER>Exhibit 27</td>

<td></td>

<td ALIGN=CENTER>20</td>
</tr>
</TABLE>

<p><b><font face="Times New Roman">ITEM 6(b) REPORTS ON FORM 8-K</font></b>
<p>No reports on 8-K were filed during the quarter for which this report
is filed.
<p><b><font face="Arial">SIGNATURES</font></b>
<p><font face="Times New Roman">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.</font>
<br> 
<table WIDTH="100%" >
<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>
<br><b><font face="Times New Roman"></font></b> </td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Date: November 12, 1999</font></td>

<td><font face="Times New Roman">/s/ David C. Mebane</font></td>
</tr>

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

<td><font face="Times New Roman">David C. Mebane</font>
<br><font face="Times New Roman">Chairman, President and Chief Executive
Officer</font>
<br><font face="Times New Roman">(Duly Authorized Officer)</font>
<br><font face="Times New Roman"></font> </td>
</tr>

<tr VALIGN=TOP>
<td><font face="Times New Roman">Date: November 12, 1999</font></td>

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

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

<td><font face="Times New Roman">Terry A. Hanson</font>
<br><font face="Times New Roman">Vice President - Finance</font>
<br><font face="Times New Roman">(Chief Financial and Accounting Officer)</font></td>
</tr>
</TABLE>

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