Document:

EXHIBIT 10.16

          ______________________________________________

                        OPERATING AGREEMENT

                                OF

                 AMERICAN TRANSMISSION COMPANY LLC

          ______________________________________________

                    Dated as of January 1, 2001
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                                                            TABLE OF CONTENTS
                                                                                                                       Page
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ARTICLE I DEFINITIONS....................................................................................................1

    SECTION 1.1         Definitions......................................................................................1

ARTICLE II FORMATION OF COMPANY.........................................................................................12

    SECTION 2.1         Name, Office, Registered Agent and Continuance..................................................12
    SECTION 2.2         Governing Law...................................................................................13
    SECTION 2.3         Purpose.........................................................................................13
    SECTION 2.4         Powers..........................................................................................14
    SECTION 2.5         Restrictions....................................................................................14
    SECTION 2.6         Term............................................................................................15
    SECTION 2.7         Adequacy........................................................................................15
    SECTION 2.8         Operating Protocols.............................................................................16

ARTICLE III MEMBERS AND CAPITAL CONTRIBUTIONS...........................................................................16

    SECTION 3.1         Members and Schedule A..........................................................................16
    SECTION 3.2         Initial Capital Contributions...................................................................16
    SECTION 3.3         Additional Members by Right.....................................................................17
    SECTION 3.4         Pre-emptive Rights..............................................................................18
    SECTION 3.5         Contribution of Additional Transmission Assets..................................................19
    SECTION 3.6         Voluntary Additional Capital Contributions......................................................20
    SECTION 3.7         Issuance to Corporate Manager...................................................................21
    SECTION 3.8         Adjustment of Tax-Exempt Members' Capital.......................................................23
    SECTION 3.9         Capital Accounts................................................................................24
    SECTION 3.10        Initial Debt Financing..........................................................................25
    SECTION 3.11        No Interest.....................................................................................25
    SECTION 3.12        No Third Party Beneficiary......................................................................25
    SECTION 3.13        Membership Units as Securities..................................................................26
    SECTION 3.14        Month-End Convention............................................................................26

ARTICLE IV RIGHTS, OBLIGATIONS AND POWERS OF THE CORPORATE MANAGER......................................................26

    SECTION 4.1         Management of the Company.......................................................................26
    SECTION 4.2         Authority of Corporate Manager..................................................................27
    SECTION 4.3         Indemnification and Exculpation of Indemnitees..................................................27
    SECTION 4.4         Liability of the Corporate Manager..............................................................28
    SECTION 4.5         Corporate Expenses and Administrative Expenses..................................................29
    SECTION 4.6         Outside Activities..............................................................................30
    SECTION 4.7         Title to Company Assets.........................................................................30

ARTICLE V ACCOUNTING, TAX AND FISCAL MATTERS............................................................................30

    SECTION 5.1         Fiscal and Taxable Year.........................................................................30
    SECTION 5.2         Books...........................................................................................30
    SECTION 5.3         Records.........................................................................................30
    SECTION 5.4         Company Funds...................................................................................31
    SECTION 5.5         Tax Returns.....................................................................................31
    SECTION 5.6         Tax Elections...................................................................................32
    SECTION 5.7         Tax Matters, Tax Elections and Special Basis Adjustments........................................32
    SECTION 5.8         Access to Records...............................................................................32

ARTICLE VI ALLOCATIONS AND DISTRIBUTIONS................................................................................33

    SECTION 6.1         Allocations.....................................................................................33
    SECTION 6.2         Cash Available for Distribution.................................................................34
    SECTION 6.3         No Right to Distributions in Kind...............................................................36
    SECTION 6.4         Limitations on Distributions....................................................................36
    SECTION 6.5         Distributions Upon Liquidation..................................................................36
    SECTION 6.6         Substantial Economic Effect.....................................................................37
    SECTION 6.7         Quarter-End Convention..........................................................................37
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ARTICLE VII CHANGES IN CORPORATE MANAGER................................................................................37

    SECTION 7.1         Transfer of the Corporate Manager's Member Interest.............................................37
    SECTION 7.2         Admission of a Substitute or Additional Corporate Manager.......................................39
    SECTION 7.3         Effect of Bankruptcy, Withdrawal or Liquidation of the Corporate Manager........................39
    SECTION 7.4         Removal of a Corporate Manager..................................................................40

ARTICLE VIII RIGHTS AND OBLIGATIONS OF THE NON-MANAGING MEMBERS.........................................................41

    SECTION 8.1         Management of the Company.......................................................................41
    SECTION 8.2         Power of Attorney...............................................................................41
    SECTION 8.3         Limitation on Liability of Non-Managing Members.................................................41
    SECTION 8.4         Redemption Right................................................................................41
    SECTION 8.5         Registration....................................................................................43

ARTICLE IX TRANSFER.....................................................................................................47

    SECTION 9.1         Purchase Not for Distribution...................................................................47
    SECTION 9.2         Restrictions on Transfer of Member Interests....................................................47
    SECTION 9.3         Permitted Transfers.............................................................................49
    SECTION 9.4         Admission of Substitute Member..................................................................49
    SECTION 9.5         Rights of Assignees of Members Interests........................................................50
    SECTION 9.6         Effect of Bankruptcy or Termination of a Non-Managing Member....................................51
    SECTION 9.7         Month-End Convention............................................................................51

ARTICLE X AMENDMENTS; MERGER............................................................................................51

    SECTION 10.1        Amendments......................................................................................51
    SECTION 10.2        Merger..........................................................................................52

ARTICLE XI MISCELLANEOUS................................................................................................52

    SECTION 11.1        Notices.........................................................................................52
    SECTION 11.2        Entire Agreement................................................................................52
    SECTION 11.3        Interpretation and Construction.................................................................52
    SECTION 11.4        Counterparts....................................................................................53
    SECTION 11.5        Binding on Successors...........................................................................53
    SECTION 11.6        Severability....................................................................................53
    SECTION 11.7        Rights and Remedies.............................................................................53
    SECTION 11.8        Economic Benefit................................................................................53

                                                        Schedules and Exhibits

Schedule A List of Members and Member Units
Schedule B Illustrative TEIA Calculations
Schedule C 1999 Load Ratio Shares

Exhibit A  Notice of Exercise of Redemption Right
Exhibit B  Dispute Resolution Provisions
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                 AMERICAN TRANSMISSION COMPANY LLC

                        OPERATING AGREEMENT

      THIS  OPERATING  AGREEMENT of AMERICAN  TRANSMISSION  COMPANY
LLC, a Wisconsin  limited  liability  company (the  "Company"),  is
made and  entered  into as of  January  1,  2001,  by and among the
parties  listed on  Schedule A, for the  regulation  of the affairs
and  conduct of the  Company  and  certain  relationships  with and
among its Members.

                             RECITALS

      1.   1999  Wisconsin  Act  9  includes   provisions  commonly
referred to as the Reliability 2000  Legislation,  which authorized
the   organization   of  a  new   company   to   provide   electric
transmission service.

      2.   Pursuant  to  the  provisions  of the  Reliability  2000
Legislation,  electric  transmission  utilities were  authorized to
contribute their transmission  assets to such company,  and certain
other   electric   utilities   were   authorized   to   make   cash
contributions to such company.

      3.   The   initial   parties   listed  on   Schedule  A  have
                                                  -----------
determined  to  establish  the  Company  for such  purpose and have
entered  into this  Operating  Agreement  to govern the  affairs of
the Company and certain relationships with and among its Members.

                                    ARTICLE I

                                   DEFINITIONS

SECTION 1.1     Definitions.
                ------------

      In addition to the  definitions  contained in this Agreement,
the following  terms used herein shall have the following  meanings
assigned to them.

      "Act" means the  Wisconsin  Limited  Liability  Company  Act,
Chapter  183 of the  Wisconsin  Statutes,  as amended  from time to
time.

      "Additional   Securities"  means  any  additional   Corporate
Shares (other than  Corporate  Shares issued in connection  with an
exchange  pursuant  to Section  8.4  hereof)  or  rights,  options,
warrants or convertible or exchangeable  securities  containing the
right to subscribe for or purchase  Corporate  Shares, as set forth
in Section 3.7(a)(ii).

      "Administrative  Expenses" means (i) all  administrative  and
operating  costs and expenses  incurred by the Company,  (ii) those
administrative   costs  and  expenses  of  the  Corporate  Manager,
including  any salaries or other  payments to  directors,  officers
or employees  of the  Corporate  Manager,  and any  accounting  and
legal  expenses  of the  Corporate  Manager,  which  expenses,  the
Members  have  agreed,  are  expenses  of the  Company  and not the
Corporate  Manager,  and (iii) to the extent not included in clause
(ii) above, Corporate Expenses.
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      "Affiliate" means, with respect to any Person:

      (a)  Any Person  owning or holding  directly or indirectly 5%
or more of the voting securities of such Person;

      (b)  Any Person in any chain of  successive  ownership  of 5%
or more of the voting securities of such Person;

      (c)  Any  corporation  5% or more of whose voting  securities
are  owned  by  any  Person   owning  5%  or  more  of  the  voting
securities  of  such  Person  or by  any  Person  in any  chain  of
successive  ownership  of 5% or more of the  voting  securities  of
such Person;

      (d)  Any Person who is an officer or  director of such Person
or of any  corporation  in any chain of successive  ownership of 5%
or more of the voting securities of such Person;

      (e)  Any corporation  operating a servicing  organization for
furnishing  supervisory,  construction,   engineering,  accounting,
legal or similar  services to such Person,  which  corporation  has
one or more  officers or one or more  directors in common with such
Person,  and any other  corporation  which has  directors in common
with such Person if the number of directors of the  corporation  is
more  than   one-third  of  the  total  number  of  such   Person's
directors; or

      (f)  Any subsidiary of such Person.

      "Agreement"  means  this  Operating  Agreement,  as it may be
amended from time to time in accordance with its terms.

      "Article 8" means  Article 8 of the Uniform  Commercial  Code
as codified at Chapter 408 of the Wisconsin Statutes.

      "Asset  Contribution   Agreement"  means  any  of  the  asset
contribution  agreements  to be entered  into  between  the Company
and each of the Transmission  Utilities,  which agreements  provide
for the contribution of such  Transmission  Utility's  Transmission
Assets in exchange for Member Units.

      "Capital Account" has the meaning provided in Section 3.9.

      "Capital  Contributions" means the aggregate contributions by
a Member to the  capital of the  Company as set forth on  Schedule A,
                                                          -----------
as amended from time to time.

      "Capital Event" means (i) any Company  transaction  that does
not  result  in a  carry-over  of  a  Tax-Exempt  Member's  Capital
Account,  such  as a  liquidation  of the  Company,  sale of all or
substantially  all of its assets or a merger of the Company  into a
corporation,  (ii) the sale of all or a portion  of the Units  held
by a Tax-Exempt  Member to a Member that  directly or indirectly is
a Person  whose  share of taxable  income or loss of the Company is
subject to tax under Code  Section  11,  (iii) the  exchange of all
or a  portion  of  the  Units  held  by  a  Tax-Exempt  Member  for
Corporate  Shares,  (iv) any  change  of more than 20% of the total
Tax-Exempt  Members' Percentage  Interests,  or (v) any other event
or occurrence  where the adjustment of Tax-Exempt  Member's capital
pursuant  to  Section  3.8  is  no  longer   necessary  to  prevent
diminution  of the  non-Tax-Exempt  Members'  returns on the equity
portion of the rate base in the rate-making process.
<PAGE>

      "Cash  Amount"  means an amount of cash per Member Unit equal
to the  Value  of the  Corporate  Shares  Amount  on  the  date  of
receipt by the Corporate Manager of a Notice of Redemption.

      "Cash  Available  for  Distribution"   shall  mean,  for  any
period,  the  excess,  if any,  of  (i) the  cash  receipts  of the
Company (other than from (A) the Initial  Financing,  (B) financing
pursuant  to  Section   3.5(d),   or  (C)  a  Terminating   Capital
Transaction),   receipts   from  the   sale,   exchange   or  other
disposition  of  Company   assets,   and  amounts   withdrawn  from
Reserves,  over  (ii) disbursements  of cash by the Company  (other
than  distributions  to Members and amounts paid with receipts from
(A) the  Initial  Financing,  (B)  financing  pursuant  to  Section
3.5(d), or (C) a Terminating  Capital  Transaction),  including the
payment of  operating  expenses,  debt  service  on loans,  capital
expenditures,  and amounts set aside for  Reserves.  The  foregoing
amounts  are   intended   not  to  exceed   "operating   cash  flow
distributions,"   as   defined  in   Section   1.707-4(b)   of  the
Regulations.

      "Chapter 196" means  Chapter 196 of the  Wisconsin  Statutes,
Regulation of Public Utilities.

      "Charter"  means  the  Articles  of   Incorporation   of  the
Corporate   Manager   filed  with  the   Wisconsin   Department  of
Financial  Institutions,   as  such  Articles  may  be  amended  or
restated from time to time.

       "Code" means the Internal  Revenue Code of 1986,  as amended
from time to time (or any  corresponding  provisions  of succeeding
law).

      "Commission"  means the United States Securities and Exchange
Commission.

      "Company"  means American  Transmission  Company LLC, and its
successors and assigns.

      "Company   Minimum   Gain"  has  the  meaning  set  forth  in
Regulations  Section  1.704-2(d).  In accordance  with  Regulations
Section   1.704-2(d),   the  amount  of  Company  Minimum  Gain  is
determined  by  first  computing,   for  each  Company  nonrecourse
liability,  any gain the  Company  would  realize if it disposed of
the property subject to that liability for no  consideration  other
than full  satisfaction of the liability,  and then aggregating the
separately  computed  gains.  A Member's  share of Company  Minimum
Gain shall be  determined in accordance  with  Regulations  Section
1.704-2(g)(1).

      "Company  Record  Date" has the  meaning  provided in Section
6.2(g).
<PAGE>

      "Contribution  Value"  means  the  value,  as of the  date of
contribution,  of the Transmission  Assets  contributed by a Member
pursuant to its Asset Contribution  Agreement,  as reflected on the
FERC Books of  Account  of the Member (or with  respect to a Member
without an OATT,  its regulatory  books of account  relating to the
Transmission   Assets   being   contributed),   as  adjusted  on  a
dollar-for-dollar  basis for (i) Deferred Taxes,  and (ii) Deferred
Investment   Tax  Credits   associated   with  those   Transmission
Assets.  The  Members  agree  that the  Contribution  Values of the
Transmission  Assets  contributed by MG&E, WEPCO, WPL and WPS as of
the  Operations  Date shall be further  adjusted by increasing  the
number  of  Member  Units  to be  received  by  MG&E  by 2/3 of the
difference  between  (A) the  Contribution  Value  that MG&E  would
have had if  Deferred  Investment  Tax  Credits  had not been taken
into  account  and (B)  such  Contribution  Value  taking  Deferred
Investment   Tax  Credits  into  account,   subject  to  a  maximum
aggregate  reallocation  of $708,727 of  Contribution  Value (prior
to the  Initial  Financing).  The Member  Units to be  received  by
WEPCO  and  WPL  shall  each  be  reduced  by  45%  of  the  amount
reallocated,  and the number of Member  Units to be received by WPS
shall be  reduced by 10% of the  amount  reallocated.  Contribution
Value shall not  otherwise  be adjusted  for the effect of any Code
Section  704(c)  allocations,  unless  such  amount  would  cause a
reallocation  of  annual  income  of  more  than  $250,000  for any
Member,  in  which  case the  Members  shall  endeavor  to agree on
alternative arrangements.

      "Conversion  Factor"  means 1.0,  provided  that in the event
that the  Corporate  Manager (i) declares or pays a dividend on its
outstanding  Corporate  Shares  in  Corporate  Shares  or  makes  a
distribution  to all holders of its  outstanding  Corporate  Shares
in Corporate  Shares,  (ii)  subdivides its  outstanding  Corporate
Shares or (iii) combines its  outstanding  Corporate  Shares into a
smaller number of Corporate  Shares,  the  Conversion  Factor shall
be adjusted by  multiplying  the  Conversion  Factor by a fraction,
the  numerator  of which  shall be the number of  Corporate  Shares
issued  and  outstanding  on the  record  date for  such  dividend,
distribution,   subdivision  or  combination   (assuming  for  such
purposes  that  such   dividend,   distribution,   subdivision   or
combination  has occurred as of such time),  and the denominator of
which shall be the actual  number of Corporate  Shares  (determined
without the above  assumption)  issued and outstanding on such date
and,  provided  further,  that in the event  that an  entity  other
than an Affiliate of the Corporate  Manager shall become  Corporate
Manager  pursuant to any merger,  consolidation  or  combination of
the Corporate  Manager with or into another entity (the  "Successor
Entity"),  the  Conversion  Factor shall be adjusted by multiplying
the  Conversion  Factor by the  number  of shares of the  Successor
Entity  into which one  Corporate  Share is  converted  pursuant to
such merger,  consolidation  or  combination,  determined as of the
date  of   such   merger,   consolidation   or   combination.   Any
adjustment  to  the  Conversion   Factor  shall  become   effective
immediately  after the effective date of such event  retroactive to
the record date, if any, for such event;  provided,  however,  that
if the  Corporate  Manager  receives a Notice of  Redemption  after
the  record  date,   but  prior  to  the  effective  date  of  such
dividend,    distribution,    subdivision   or   combination,   the
Conversion  Factor shall be determined as if the Corporate  Manager
had  received  the Notice of  Redemption  immediately  prior to the
record  date  for  such  dividend,  distribution,   subdivision  or
combination.

      "Corporate  Expenses"  means (i) costs and expenses  relating
to the formation  and  continuity of existence and operation of the
Corporate    Manager   and   any   Subsidiaries    thereof   (which
Subsidiaries  shall,  for purposes  hereof,  be included within the
<PAGE>

definition  of  Corporate  Manager),   including  taxes,  fees  and
assessments  associated  therewith,  any and all costs, expenses or
fees  payable  to  any   director,   officer  or  employee  of  the
Corporate  Manager,  (ii) costs and expenses relating to any public
offering and  registration  of securities by the Corporate  Manager
and  all  statements,   reports,   fees  and  expenses   incidental
thereto,  including,  without  limitation,  underwriting  discounts
and  selling  commissions   applicable  to  any  such  offering  of
securities,  and any costs and expenses  associated with any claims
made by any  holders  of such  securities  or any  underwriters  or
placement  agents  thereof,  (iii)  costs and  expenses  associated
with any  repurchase of any  securities  by the Corporate  Manager,
(iv)  costs  and  expenses  associated  with  the  preparation  and
filing of any periodic or other reports and  communications  by the
Corporate   Manager   under   federal,   state  or  local  laws  or
regulations,  including filings with the Commission,  (v) costs and
expenses  associated with compliance by the Corporate  Manager with
laws,  rules and  regulations  promulgated by any regulatory  body,
including the Commission and any  securities  exchange,  (vi) costs
and  expenses  associated  with any 401(k)  plan,  incentive  plan,
bonus  plan  or  other  plan  providing  for  compensation  for the
employees  of the  Corporate  Manager,  (vii)  costs  and  expenses
incurred  by the  Corporate  Manager  relating  to any  issuing  or
redemption of Member  Interests  and (viii) all other  operating or
administrative  costs  of the  Corporate  Manager  incurred  in the
ordinary  course of its  business  on  behalf  of or in  connection
with the Company.

      "Corporate  Manager" means ATC  Management  Inc., a Wisconsin
corporation,   and  any  Person  who   becomes  a   substitute   or
additional  Corporate Manager as provided herein,  and any of their
successors as Corporate Manager.

      "Corporate  Share" means one share of common  stock,  Class A
or Class B, of the Corporate Manager.

      "Corporate  Shares Amount" means a number of Corporate Shares
equal to the  product of the  number of Member  Units  offered  for
redemption  by a Redeeming  Member  pursuant to a completed  Notice
of Redemption  submitted by such Redeeming  Member to the Corporate
Manager,  multiplied  by the  Conversion  Factor as adjusted to and
including  the  Specified  Redemption  Date;  provided  that in the
event the  Corporate  Manager  issues to all  holders of  Corporate
Shares rights,  options,  warrants or  convertible or  exchangeable
securities   entitling  the   shareholders   to  subscribe  for  or
purchase  Corporate  Shares,  or any other  securities  or property
(collectively,  the  "rights"),  and the rights have not expired at
the Specified  Redemption  Date,  then the Corporate  Shares Amount
shall  also  include  the  rights  issuable  to  a  holder  of  the
Corporate  Shares  Amount on the record date fixed for  purposes of
determining the holders of Corporate Shares entitled to rights.

      "Deferred  Investment  Tax Credits"  means those  unamortized
deferred   investment   tax   credits  (as  defined  in  the  Code)
associated with the  Transmission  Assets that are reflected on the
FERC Books of  Account  (with  respect to any Member  with an OATT)
or  regulatory   books  of  account  (with  respect  to  all  other
Members) of the Member  contributing  such  assets,  as adjusted to
the Operations  Date or date of  contribution  of the  Transmission
Assets, if other than the Operations Date.

      "Deferred  Taxes"  means the income tax  liability or benefit
associated  with  the  contributed  Transmission  Assets  that  are
reflected  on the  FERC  Books  of  Account  (with  respect  to any
Member with an OATT) or  regulatory  books of account (with respect
to  all   other   Members)   of  the   Member   contributing   such
Transmission  Assets,  as adjusted to the  Operations  Date or date
of  contribution  of the  Transmission  Assets,  if other  than the
Operations  Date,  that  has  been  deferred  as a  result  of  the
difference  for  regulatory  accounting  and tax  purposes  between
depreciation  or  other   plant-related   items  and  reflects  the
historic  tax  rates  in  effect  at the time  that the  difference
arose.
<PAGE>

      "Dispute  Resolution  Provisions"  means those provisions for
resolving   disputes   among  the   Members  and  the  Company  and
Corporate Manager set forth as Exhibit B to this Agreement.
                               ---------

      "Effective  Date" means June 12, 2000, the date the Company's
articles  of   organization   were   accepted  for  filing  by  the
Wisconsin Department of Financial Institutions.

      "Effective  Period"  has  the  meaning  provided  in  Section
8.5(a)(ii).

      "Electric  Utility"  means (i) a public utility as defined in
Section  196.01  of  the  Wisconsin  Statutes,  that  is  involved  in the
generation,   transmission,   distribution   or  sale  of  electric
energy,   (ii)  a  municipal   electric  company   organized  under
Section  66.073 of the  Wisconsin  Statutes,  (iii) a  wholesale  electric
cooperative  as  defined  in   Section  196.485(1)(k)   of  the  Wisconsin
Statutes, or (iv) a Retail Electric Cooperative.

      "Equity   Accounting"  means  the  accounting  standard  that
allows a Member,  subject  to  certain  conditions,  to report  its
investment  in the Company on such  Member's  balance sheet and its
allocable  share of the Company's  profits on such Member's  income
statement, as such standard is applied on the Effective Date.

      "Equity  Value" means the equity of the Company  attributable
to Members other than Tax-Exempt  Members,  determined by reference
to a balance  sheet  prepared  in  accordance  with  FERC  Books of
Account.  For  this  purpose,  the  Tax-Exempt   Investment  Amount
attributable to the Tax-Exempt Members shall be excluded.

      "ESE"  means  Edison  Sault  Electric  Company,   a  Michigan
corporation.

      "Event of  Bankruptcy" as to any Person means the filing of a
petition  for relief as to such Person as debtor or bankrupt  under
the  Bankruptcy  Code of 1978 or  similar  provision  of law of any
jurisdiction  (except if such  petition is contested by such Person
and has been  dismissed  within 90 days);  insolvency or bankruptcy
of  such  Person  as  finally  determined  by a  court  proceeding;
filing by such Person of a petition or  application  to  accomplish
the same or for the  appointment  of a  receiver  or a trustee  for
such Person or a substantial  part of its assets;  commencement  of
any  proceedings  relating  to such  Person  as a debtor  under any
other reorganization,  arrangement,  insolvency, adjustment of debt
or liquidation  law of any  jurisdiction,  whether now in existence
or  hereinafter  in effect,  either by such  Person or by  another,
provided  that if such  proceeding  is commenced  by another,  such
Person  indicates  its  approval  of  such   proceeding,   consents
thereto or acquiesces  therein,  or such proceeding is contested by
such Person and has not been finally dismissed within 90 days.
<PAGE>

      "Exchange Act" means the Securities  Exchange Act of 1934, as
amended.

      "FERC" means the Federal  Energy  Regulatory  Commission,  or
its successor in interest.

      "FERC  Books  of  Account"   means  those  books  of  account
pertaining  to  transmission  that  are  required  by  FERC  to  be
maintained by companies that have filed  transmission  tariffs with
FERC.

      "GAAP"  means United  States  generally  accepted  accounting
principles consistently applied.

      "Indemnitee"   means  (i)  any  Person  made  a  party  to  a
proceeding  by reason of its status as the  Corporate  Manager or a
director,  officer  or  employee  of the  Corporate  Manager or the
Company and (ii) such other  Persons  (including  Affiliates of the
Company or the  Corporate  Manager)  as the  Corporate  Manager may
designate from time to time, in its sole and absolute discretion.

      "Initial   Financing"   means  the  Company's   initial  debt
financing contemplated in Section 3.10.

      "IPO" means the closing of an  offering of  Corporate  Shares
that has the  effect of  listing  the  Corporate  Shares on the New
York Stock  Exchange,  American Stock Exchange,  NASDAQ,  or any of
their successors in interest.

      "Jurisdictional  Area"  means  the  geographic  area  that is
currently  served  by  the  Mid-America   Inter-connected  Network,
Inc., or the Mid-Continent  Area Power Pool reliability  council of
the North American Electric Reliability Council.

      "Land Right" means any right in real property,  including fee
simple  ownership  easement,  lease or other  right,  that has been
acquired for a  Transmission  Facility  that is located or intended
to be located on the real property.

      "Load Ratio Share"  means,  with respect to any Person,  such
Person's  firm  electric   usage  in  Wisconsin   during  1999,  as
determined  by dividing  such Person's kWh sales shown in Schedule C
                                                          ----------
by the  total  kWh  sales  in  Wisconsin  shown  in  Schedule  C,
                                                     ------------
converting   the  quotient  to  a  percentage   and  carrying  such
percentage   to  two  decimal   places  using   standard   rounding
conventions.

      "Losses" has the meaning provided in Section 6.1(f).

      "Majority in Interest" means the affirmative  vote or consent
of Members holding Percentage  Interests  aggregating  greater than
50%.
<PAGE>

      "Member Interest" means an ownership  interest in the Company
held by a Member and  includes  any and all  benefits  to which the
holder of such a Member  Interest  may be  entitled  as provided in
this  Agreement,  together with all  obligations  of such Person to
comply with the terms and provisions of this Agreement.

      "Member   Nonrecourse   Debt  Minimum  Gain"  means  "partner
nonrecourse   debt  minimum  gain"  as  set  forth  in  Regulations
Section  1.704-2(i).  A Member's share of Member  Nonrecourse  Debt
Minimum Gain shall be  determined in  accordance  with  Regulations
Section 1.704-2(i)(5).

      "Member Unit" means a Member  Interest in the Company  having
an  initial  value of $10.  The  number  of Member  Units  owned by
each  Member  shall  be as set  forth on  Schedule  A, as it may be
                                          -----------
amended from time to time.

      "Members"  means the  Persons  identified  on Schedule A from
                                                    ----------
time to time and their successors and permitted assigns.

      "MG&E" means  Madison Gas and Electric  Company,  a Wisconsin
corporation.

      "MISO"  means the  Midwest  Independent  Transmission  System
Operator,  Inc., the  establishment of which FERC has conditionally
authorized  in an  order  issued  on  September  16,  1998,  or any
independent system operator or regional  transmission  organization
that has been approved under federal law to succeed the MISO.

      "NASDAQ" means the Nasdaq National Market System.

      "Net Book Value" means the aggregate  Capital Accounts of all
the  Members  kept in  accordance  with  Section  3.9,  less,  with
respect to the Tax-Exempt  Members,  an amount equal to the excess,
if any, of the  Tax-Exempt  Investment  Amount over the  Tax-Exempt
Ownership Interest.

      "Net  Contribution"  shall  have  the  meaning  set  forth in
Section 3.8.

      "Non-Managing  Member"  means any Person named as a Member on
Schedule A other  than the  Corporate  Manager,  and any Person who
----------
becomes a Substitute or  additional  Non-Managing  Member,  in such
Person's capacity as a Non-Managing Member in the Company.

      "Notice  of  Redemption"  means  the  Notice of  Exercise  of
Redemption Right substantially in the form attached as Exhibit A.
                                                       ----------

      "OATT" means Open Access Transmission Tariff.

      "Operations  Date" means the date that the Company  commences
operations, as determined by the PSCW.

      "Percentage  Interest" means the percentage  interest of each
Member in the Company,  as  determined by dividing the Member Units
owned by such  Member by the total  number  of  Member  Units  then
outstanding.
<PAGE>

      "Person"  means  an  individual,   corporation,   general  or
limited   partnership,   joint   venture,   trust,   unincorporated
association,  limited  liability  company  or any  other  legal  or
commercial entity.

      "Profits" has the meaning provided in Section 6.1(f).

      "PSCW" means the Public Service  Commission of Wisconsin,  or
its successor in interest.

      "PUHCA"  means the  Public  Utility  Holding  Company  Act of
1935, as amended.

      "Redeeming  Member"  has  the  meaning  provided  in  Section
8.4(a).

      "Redemption  Amount"  means  either  the Cash  Amount  or the
Corporate  Shares  Amount,  as  selected by the  Corporate  Manager
pursuant to Section 8.4(b) hereof.

      "Redemption  Right"  has  the  meaning  provided  in  Section
8.4(a).

      "Redemption  Shares"  has the  meaning  provided  in  Section
8.5(a).

      "Registrable   Securities"   means   (i)   any   issued   and
outstanding   Corporate  Shares,  and  (ii)  any  Corporate  Shares
issued or  issuable  directly  or  indirectly  with  respect to the
outstanding  Corporate  Shares  by way of stock  dividend  or stock
split   or  in   connection   with   a   combination   of   shares,
recapitalization,  merger,  consolidation or other  reorganization.
As to any particular shares  constituting  Registrable  Securities,
such  shares  will  cease to be  Registrable  Securities  when they
have been (x) effectively  registered  under the Securities Act and
disposed of in accordance  with a registration  statement  covering
them or (y) sold to the  public  pursuant  to Rule 144 (or by other
similar provision under the Securities Act).

      "Registration  Statement" has the meaning provided in Section
8.5(a).

      "Regulations"  means the Income Tax  Regulations  promulgated
under the Code,  as such  Regulations  may be amended  from time to
time    (including    corresponding    provisions   of   succeeding
Regulations).

      "Reliability   2000   Legislation"   means  that  portion  of
Wisconsin  Act 9 (the  1999-2001  Biennial  Budget Act) relating to
public utility  holding  companies,  electric  power  transmission,
public benefits and other aspects of electric utility regulation.

      "Reserves"  means the amount of cash  determined from time to
time by the  Corporate  Manager to be  required  by the Company for
its   operations,   including   the   construction   of  additional
Transmission Facilities.

      "Retail Electric  Cooperative" means a cooperative  organized
under  Chapter 185 of the Wisconsin  Statutes that provides  retail
electric service to its members.

      "SBWGE" means South Beloit Water,  Gas and Electric  Company,
an Illinois corporation.
<PAGE>

      "Securities  Act"  means  the  Securities  Act  of  1933,  as
amended.

      "Service" means the Internal Revenue Service.

      "Specified  Redemption  Date" means the first business day of
the month that is at least 60  calendar  days after the  receipt by
the Corporate Manager of a Notice of Redemption.

      "Subscription  Agreement"  means  either of the  subscription
agreements  to be entered  into  between the Company and any Member
that is not a Transmission  Utility,  which agreements  provide for
the contribution of cash in exchange for Member Units.

      "Substitute  Members" means those Persons admitted as Members
in accordance with Section 9.4.

      "Successor   Entity"   has  the   meaning   provided  in  the
definition of "Conversion Factor" contained herein.

      "Tax-Exempt  Investment  Amount"  means,  with  respect  to a
Tax-Exempt Member, an amount determined as follows:

                         TEOI x TEIP

, where TEOI is the Tax-Exempt  Ownership  Interest and TEIP is the
Tax-Exempt Investment Percentage.

      "Tax-Exempt   Investment   Percentage"   means  a  percentage
determined as follows:

                         RIOUER%
                         -------
                         IIOUER%

, where  RIOUER% is the Reduced IOU Equity  Return  Percentage  and
IIOUER%  is  the  Increased  IOU  Equity  Return  Percentage.   The
Reduced   IOU  Equity   Return   Percentage   means  a   percentage
determined as follows:

ER%-((ER% - ((ER% - AMORT/IOUCRB] ) x TEPI X EITR%)) x (1 -TEPI))/ IOUOI/IOUCRB

, where  ER% is equal to an  equity  return  percentage  calculated
using the most recently  approved FERC  authorized  equity  return;
AMORT is equal to the  amount of  Deferred  Investment  Tax  Credit
and  excess   deferred   income  taxes;   EITR%  is  equal  to  the
effective  income tax rate applied to the Company by FERC;  TEPI is
equal to the aggregate  Percentage  Interests of all the Tax-Exempt
Members;  IOUOI  is  equal  to the  Equity  Value  attributable  to
Members other than Tax-Exempt  Members;  and IOUCRB is equal to the
equity  amount of the rate base  contributed  by, and allocable to,
all Members other than Tax-Exempt Members.
<PAGE>

The  Increased  IOU Equity  Return  Percentage  means a  percentage
determined as follows:

                         (ER% - (ER% x TEPI x EITR%)) x TEPI

, where ER%, EITR% and TEPI are defined above.

      "Tax-Exempt  Member"  means a Member whose share of income or
loss of the Company is exempt from federal income taxation.

      "Tax Matters Member" has the meaning provided in Section 5.7.

      "Tax-Exempt  Ownership  Interest"  means,  with  respect to a
Tax-Exempt Member, an amount determined as follows:

                         IOUOI x (?TEPI/ 1 - TEPI)

, where  IOUOI  and TEP are  defined  above  and  ?TEPI is equal to
the Percentage Interest of the Tax-Exempt Member in question.

      "Terminating  Capital  Transaction" means the sale,  exchange
or other  disposition of all or substantially  all of the assets of
the Company,  after which  transaction the Company is dissolved and
terminated.

      "Trading  Day"  means a day on which the  principal  national
securities  exchange  on which a security  is listed or admitted to
trading is open for the  transaction  of business or, if a security
is not listed or  admitted  to trading on any  national  securities
exchange,  shall mean any day other than a Saturday,  a Sunday or a
day on  which  banking  institutions  in the  State of New York are
authorized or obligated by law or executive order to close.

      "Transfer" has the meaning provided in Section 9.2.

      "Transmission  Area"  means the area of  Wisconsin  that,  on
January  1,  1997,  was  served by the  Mid-America  Interconnected
Network,  Inc.  reliability  council of the North American Electric
Reliability Council.

      "Transmission  Assets" means the Transmission  Facilities and
associated Land Rights.

      "Transmission-Dependent  Utility"  means an Electric  Utility
that is not a  Transmission  Utility and that is  dependent  on the
transmission  system of another Person for  delivering  electricity
to the electric utility's customers.
<PAGE>

      "Transmission  Facility"  means  any  pipe,  pipeline,  duct,
wire,  line,  conduit,  pole,  tower,  equipment or other structure
used for the  transmission  of electric  power that is  contributed
to or owned or leased by the Company.

      "Transmission  Utility" means a cooperative  organized  under
Chapter  185 of the  Wisconsin  Statutes  or a public  utility  (as
defined  in  Section  196.01  of  the  Wisconsin  Statutes)  that  owns  a
Transmission  Facility in Wisconsin and that provides  transmission
service in Wisconsin.

      "Value" means,  with respect to any security,  the average of
the daily  market price of such  security  for the ten  consecutive
Trading  Days  immediately  preceding  the date of such  valuation.
The market  price for each such  Trading  Day shall be: (i) if such
security  is  listed  or  admitted  to  trading  on any  securities
exchange or the NASDAQ,  the closing  sale price,  regular  way, on
such day, or if no such sale takes  place on such day,  the average
of the  closing  bid and asked  prices,  regular  way, on such day,
(ii) if such  security  is not listed or admitted to trading on any
securities  exchange or the NASDAQ,  the last  reported  sale price
on such day or, if no sale  takes  place on such day,  the  average
of the closing  bid and asked  prices on such day, as reported by a
reliable  quotation source  designated by the Company,  or (iii) if
such  security  is  not  listed  or  admitted  to  trading  on  any
securities  exchange or the NASDAQ and no such last  reported  sale
price or closing bid and asked  prices are  available,  the average
of the  reported  high bid and low asked  prices  on such  day,  as
reported  by  a  reliable   quotation  source   designated  by  the
Company,  or if there  shall  be no bid and  asked  prices  on such
day,  the  average  of the high  bid and low  asked  prices,  as so
reported,  on the most  recent day (not more than ten days prior to
the date in  question)  for which  prices  have  been so  reported;
provided  that  if  there  are no bid  and  asked  prices  reported
during  the ten days  prior to the date in  question,  the value of
the security  shall be determined by the Corporate  Manager  acting
in  good  faith  on  the  basis  of  such   quotations   and  other
information   as  it  considers,   in  its   reasonable   judgment,
appropriate;  and  provided  that  the  Value of a share of Class B
Common  Stock (as  defined  in the  Charter)  shall be deemed to be
equal to the Value of a share of Class A Common  Stock (as  defined
in  the   Charter).   In  the  event  the  security   includes  any
additional  rights,   then  the  value  of  such  rights  shall  be
determined  by the  Corporate  Manager  acting in good faith on the
basis of such  quotations  and other  information  as it considers,
in its reasonable judgment, appropriate.

      "Voting  Members"  means  the  Corporate  Manager  and  those
Persons    who,   in    accordance    with    Wisconsin    Statutes
Section  196.485(3)(c)(3),  own a Class B Corporate Share of the Corporate
Manager.

      "WEPCO" means Wisconsin  Electric Power Company,  a Wisconsin
corporation.

      "WPL" means  Wisconsin  Power and Light Company,  a Wisconsin
corporation.

      "WPL  LLC"  means  WPL  Transco  LLC,  a  Wisconsin   limited
liability company wholly owned by WPL.

      "WPPI"  means  Wisconsin   Public  Power  Inc.,  a  Wisconsin
municipal   electric   company   organized  under  Section 66.073  of  the
Wisconsin Statutes.
<PAGE>

      "WPS"  means   Wisconsin   Public  Service   Corporation,   a
Wisconsin corporation.

      "WPS LLC" means WPS  Investments,  LLC, a  Wisconsin  limited
liability company wholly owned by WPS.

                                   ARTICLE II

                              FORMATION OF COMPANY

SECTION 2.1     Name, Office, Registered Agent and Continuance.
                -----------------------------------------------

(a)   The  name  of the  Company  shall  be  AMERICAN  TRANSMISSION
COMPANY LLC. The  Company's  initial  registered  office is located
at N16 W23217 Stone Ridge Drive,  Waukesha,  Wisconsin  53187,  and
its registered  agent is Walter T. Woelfle,  whose business  office
is identical with the Company's  registered  office.  The Company's
principal  office  and place of  business  is located at N16 W23217
Stone  Ridge  Drive,  Waukesha,  Wisconsin  53187,  or  such  other
places as the Corporate Manager may determine.

(b)   Prior to the  Operations  Date, the Company has been operated
in accordance with the Act and with various  Consents  entered into
by the  Members  from time to time.  From and after the  Operations
Date,  this  Agreement  shall  supercede such Consents with respect
to the  operation  of the  Company,  provided,  however,  that this
Agreement  shall not negate or overrule any approvals  contained in
such  Consents,   which  shall  be  deemed   ratified  by  Members'
signatures to this Agreement.

SECTION 2.2     Governing Law.
                --------------

      This  Agreement and all questions  with respect to the rights
and obligations of the Members,  the construction,  enforcement and
interpretation  hereof,  and  the  formation,   administration  and
termination  of the Company shall be governed by the  provisions of
the Act and other  applicable  laws of the State of  Wisconsin  and
the Federal Power Act.

SECTION 2.3     Purpose.
                --------

(a)   The  sole   purpose   of  the   Company   is  the   planning,
constructing,    operating,    maintaining    and    expanding   of
Transmission  Facilities  to provide for an adequate  and  reliable
transmission  system  that  meets the  needs of all users  that are
dependent on the transmission  system,  and that supports effective
competition   in  energy  markets   without   favoring  any  market
participant,  and  to  engage  in  any  and  all  other  activities
incidental or appropriate thereto.

(b)   Subject to obtaining  appropriate federal or state regulatory
approvals and to the extent not  inconsistent  with the obligations
set forth in Section 2.3(c),  the Company may acquire,  own, lease,
construct and expand  Transmission  Assets in any  jurisdiction and
may  conduct   operations  in  any  jurisdiction   where  it  owns,
operates, leases or otherwise acquires Transmission Assets.
<PAGE>

(c)   The Company undertakes and acknowledges that it shall:

(i)   Apply for any approvals  under federal law that are necessary
      for the Company to begin  operations no later than January 1,
      2001;

(ii)  Have the exclusive  duty to provide  transmission  service in
      those  areas  where it owns or  leases  Transmission  Assets,
      which  service  shall be under the  authority of MISO when it
      shall begin operations, as determined by the PSCW;

(iii) (A) contract with each Member that is a Transmission  Utility
      to  provide  reasonable  and  cost-effective   operation  and
      maintenance  services with respect to the Transmission Assets
      contributed  by it for three years  following the  Operations
      Date;  and (B)  agree  to an  extension  of  such  three-year
      period  if  the  Company  and  the  contracting  Transmission
      Utility deem appropriate;

(iv)  Assume the  obligations of a  Transmission  Utility under any
      agreement   of   such   Transmission   Utility   to   provide
      transmission  service  over its  Transmission  Facilities  or
      credits  for the  use of  Transmission  Facilities,  provided
      that the Company may modify any such  agreement to the extent
      allowed under the  agreement and to the extent  allowed under
      state or federal law;

(v)   Apply for  membership  in MISO as a single  zone for  pricing
      purposes  that  includes the  Transmission  Area and,  upon a
      determination  by the PSCW that  MISO has  begun  operations,
      transfer  operational control of its Transmission  Facilities
      to  MISO  and use  reasonable  efforts  to  ensure  that  the
      Transmission   Facilities  in  the  Transmission   Area,  the
      control  of  which  are  transferred  to MISO,  are  planned,
      constructed,  operated,  maintained and controlled as part of
      a single transmission system;

(vi)  Remain a member of MISO for at least the six-year  transition
      period that is specified in the agreement  establishing  MISO
      that was conditionally approved by FERC;

(vii) Elect to be  included in a single zone for the purpose of any
      tariff administered by MISO; provided,  however,  that if the
      transmission  charges or rates of any Transmission Utility in
      the  Transmission  Area  are 10% or more  below  the  average
      transmission  charges or rates of the Transmission  Utilities
      in the  Transmission  Area on November  5, 1999,  the Company
      shall,  after  consulting  with  each  Transmission  Utility,
      prepare a plan for  phasing  in a combined  single  zone rate
      for the  purpose  of  pricing  network  use by  users  of the
      transmission  system  operated  by MISO,  and shall seek plan
      approval  by FERC  and  MISO.  Such  plan  shall  phase in an
      average  cost-price  for the  combined  single  zone in equal
      increments over a five-year period,  except that transmission
      service  shall be provided  to all users of the  transmission
      system on a single-zone basis during the phase-in period.
<PAGE>

SECTION 2.4     Powers.
                -------

      The  Company   shall  have  all  the  powers   incident   and
appropriate  to the  performance  of its  purposes  as set forth in
Section 2.3, and all other  powers of limited  liability  companies
under the Act.  Without  limiting the foregoing,  the Company shall
have all the powers of a  transmission  company  under Chapter 196,
and as  appropriate,  under  analogous  provisions of other states'
laws where the Company is conducting business.

SECTION 2.5     Restrictions.
                -------------

(a)   The Company may not:

(i)   Sell or  transfer  its  Transmission  Assets  located  in the
      Transmission  Area to,  or  merge  such  Transmission  Assets
      with,  another Person,  unless (A) such  Transmission  Assets
      are sold,  transferred  or merged on an integrated  basis and
      in a manner  that  ensures  that the  Company's  Transmission
      Facilities   in   the   Transmission    Area   are   planned,
      constructed,  operated, maintained and controlled as a single
      transmission  system and (B) the successor agrees to be bound
      by the provisions of Section 2.7;

(ii)  Bypass the distribution  facilities of an Electric Utility or
      provide service  directly to a retail customer or member of a
      retail cooperative;

(iii) Own  electric  generation  facilities,  or  sell,  market  or
      broker  electric  capacity or energy in a relevant  wholesale
      or retail market,  or as determined by the PSCW, except that,
      if authorized  or required by FERC,  the Company may purchase
      or resell ancillary  services obtained from third parties and
      engage  in  redispatch   activities  that  are  necessary  to
      relieve transmission constraints or operate a control area.

(b)   Notwithstanding  Section  2.3,  the  Company  may  not  begin
operations  until it provides an opinion to PSCW from a  nationally
recognized  investment  banking  firm that the  Company  is able to
finance,  at  a  reasonable  cost,  its  start-up  costs,   working
capital  and   operating   expenses,   and  the  cost  of  any  new
facilities that are planned.

SECTION 2.6     Term.
                -----

(a)   The Company  shall have  perpetual  existence  unless  sooner
dissolved  or  terminated  as  provided  herein.   Subject  to  any
approvals  required  under state or federal law, the Company  shall
be dissolved upon the first to occur of the following events:

(i)   The  determination  by the Corporate  Manager to dissolve and
      terminate the Company in accordance with Section  183.0901(1)
      of the Act; or

(ii)  The entry of a decree of judicial  dissolution  under Section
      183.0902 of the Act.

(b)   The  bankruptcy,  insolvency,  dissociation or dissolution of
one or more of the  Non-Managing  Members  shall not  dissolve  the
Company.
<PAGE>

(c)   Upon the  dissolution  of the  Company  for any  reason,  the
Corporate  Manager  shall  proceed  promptly to wind up the affairs
of and  liquidate  the Company.  The  Corporate  Manager shall have
reasonable  discretion to determine  the time,  manner and terms of
any  sale or  sales  of the  Company's  property  pursuant  to such
liquidation.

SECTION 2.7     Adequacy.
                ---------

(a)   Subject  to  applicable   regulatory   approvals,   including
adherence to least-cost planning  requirements and principles,  and
subject to the oversight  and  direction of MISO where  applicable,
the  Company   shall  have  a  public   utility  duty  to  operate,
maintain,  plan and construct its  transmission  system so that the
system is adequate:

(i)   (A)  to  support  effective  competition  in  energy  markets
      without favoring any market participant;

      (B)  to  deliver  on a reliable  basis the  reasonable,  projected
           needs of all of the loads on the  electric  distribution
           systems  connected to and  dependent  upon the Company's
           facilities  for  delivery  of  reliable,   low-cost  and
           competitively-priced  electricity  to such  distribution
           systems; and

      (C)  to  provide  needed  support  to  the  distribution   systems
           interconnected   to  the  Company's   system,   where  a
           transmission   addition  is  the   least-cost   electric
           solution  to an  improvement  need,  including  but  not
           limited to, the  reliability  needs of the  distribution
           systems  that  are  owned  by the  initial  Non-Managing
           Members or their members.

(ii)  to  receive  energy  from both  existing  and new  generating
      facilities  connected  to and  dependent  upon the  Company's
      transmission of such energy.

(b)   In meeting  these  obligations,  the Company  shall treat the
needs of each electric  distribution  system  interconnected to the
Company's   system,   the   electric   loads  on  each  system  and
interconnected   generation  facilities,  in  a  non-discriminatory
manner.  The  costs  of  additions  to the  Company's  transmission
system  to meet this  adequacy  obligation  shall  not be  directly
assigned or charged to a  distribution  system,  to end users or to
generating  facilities  separately,  except in circumstances  where
approved or required by the appropriate regulatory agency.

SECTION 2.8     Operating Protocols.
                --------------------

(a)   The Company has established  certain operating protocols that
have been incorporated into its OATT.

(b)   If the Company  provides terms in any of its agreements  with
a Member that are more  favorable  to a Member  than those  granted
to any other  Member,  all Members  similarly  situated  (including
any member of a Member)  shall be entitled  to such  terms.  A term
is not more favorable if each Member is offered cost-based terms.
<PAGE>

(c)   The  Company  has   established   certain   other   operating
protocols  that will become part of the Forming Party  Agreement or
other  agreements as appropriate:  Transmission  Loss  Calculations
and  Allocation,  Transmission  Reservation  Queue,  Transition  of
Operational   Control  (and  sample  agreements  related  thereto),
Control Area Operations,  Planning Memo on Project  Prioritization,
and Calculations of Available Transmission Capacity.

                                  ARTICLE III

                        MEMBERS AND CAPITAL CONTRIBUTIONS

SECTION 3.1     Members and Schedule A.
                -----------------------

(a)   The name  and  address  of each of the  initial  Members  are
listed on Schedule A.
          -----------

(b)   The Company may,  upon  approval of the Board of Directors of
the Corporate  Manager,  admit such  additional  Persons as Members
after the  Operations  Date upon such terms and  conditions  as the
Corporate Manager deems appropriate,  provided,  however, that with
respect to the  issuance of Member  Units for cash,  it shall first
have  complied with the  provisions  of Section 3.6,  except to the
extent contemplated in Section 3.2.

(c)   The  Corporate  Manager  shall  amend  Schedule  A  upon  the
                                             -----------
admission  of  additional  Members and upon any  adjustment  in the
Members'  Capital   Contributions,   number  of  Member  Units  and
Percentage Interests.

SECTION 3.2     Initial Capital Contributions.
                ------------------------------

(a)   Each of MG&E,  WEPCO,  WPL,  ESE,  SBWGE  and WPS  agrees  to
transfer to the  Company,  on or before the  Operations  Date,  all
Transmission  Assets  owned by it, all  pursuant to separate  Asset
Contribution  Agreements  with the Company,  which  Agreements  may
provide for the  issuance of Units  directly to an Affiliate of the
transferor.

(b)   The  Corporate  Manager  agrees to purchase  for $10 each the
number of Units set forth in its Subscription Agreement.

(c)   WPPI and other  Tax-Exempt  Members  shall each purchase that
number  of  Member   Units  that  would  enable  it  to  receive  a
Percentage  Interest,  upon completion of the Initial Financing and
the  distribution  of proceeds  therefrom,  equal to its Load Ratio
Share.  The  purchase  price for each Unit shall  equal the product
of $10 and the Tax-Exempt Investment Percentage.

(d)   If a member of WPPI  contributes  Transmission  Assets to the
Company in  accordance  with Section 3.3, the Company  shall notify
WPS,  and WPS will  have  the  option,  within  30 days of the date
that  such  Transmission   Assets  are  contributed,   to  purchase
additional  Member  Units in the  Company  at a price  equal to $10
per  Member  Unit  so  as  to  enable  it to  obtain  a  Percentage
Interest  in the  Company  equal to what it would have had had such
WPPI  members  not been  allowed to  contribute  such  Transmission
Assets.  WPS's failure to purchase  additional  Member Units within
the time  specified  shall  terminate  its rights  pursuant to this
Section 3.2(d).
<PAGE>

(e)   The  number of Units  initially  issued to each  Member,  the
amount  of  each  Member's  Capital  Contribution  or  Contribution
Value,  and the Percentage  Interest of each Member is set forth by
each Member's name on Schedule A.
                      -----------

(f)   The Members  acknowledge  that WPL and WEPCO have  previously
paid $1,000 to the capital of the  Company,  and the Company  shall
return such funds,  without  interest  thereon,  on the  Operations
Date.   The  Members   further   acknowledge   that  WPPI  and  the
Corporate  Manager  have  previously  paid $1,000 to the capital of
the Company,  and the Company  shall  credit such  amounts  against
the amounts otherwise payable by such Members.

(g)   The  Members  agree  that the exact  number  of Member  Units
issued  to  each  Member  may  not  be   determinable   as  of  the
Operations  Date.  Within 150 days after the  Operations  Date, the
Company shall make such  investigations  and examine and audit such
records  as  it  deems   necessary  or   appropriate  in  order  to
determine the  definitive  Contribution  Value of the  Transmission
Assets, the corresponding  Percentage  Interests and the Tax-Exempt
Investment  Amount.  Upon  completion  of  such  investigation  and
audit,  the Company shall (i) provide  Members with work papers and
the  results  of such  investigation  and  audit,  and (ii)  notify
Members  of the  correct  number  of  Member  Units  held  by  each
Member,  and the  records  of the  Company  shall be  retroactively
adjusted.  Any disputes  with respect to the correct  allocation of
Percentage  Interests  shall be  resolved  pursuant  to the Dispute
Resolution Provisions.

SECTION 3.3     Additional Members by Right.
                ----------------------------

(a)   A  Transmission-Dependent  Utility or  transmission-dependent
rural electric  cooperative  that has (i) made all required filings
with federal and state regulatory  authorities,  and  (ii) provided
the  Company  with   evidence  of  such   Person's   corporate  (or
comparable)  authorization  to acquire  Member  Units,  in form and
substance  reasonably  satisfactory  to the  Company,  may purchase
prior to January 1, 2001,  a  Percentage  Interest  in the  Company
that is no greater than such  Person's  Load Ratio  Share.  If such
Person  owns  incidental  Transmission  Assets,  it may  contribute
them in accordance  with the last sentence of this  Section 3.3(a),
and pay cash  prior to  January  1,  2001,  to  acquire  additional
Member  Units  up to its  Load  Ratio  Share.  Notwithstanding  the
foregoing,  if  the  members  of a  Transmission-Dependent  Utility
that is a municipal  electric  company have authorized it to invest
cash based upon the Load Ratio Shares of its  members,  the members
may not  individually  purchase  interests  based  upon  their Load
Ratio  Shares.   However,   any  such  member  may  contribute  its
incidental  Transmission  Assets in exchange  for Member  Units (on
substantially   similar  terms  to  those  set  out  in  the  Asset
Contribution  Agreement)  prior to July 1, 2001,  if it has,  prior
to January 1, 2001,  (i) made  all  required  filings  with federal
and state regulatory  authorities,  (ii) provided  the Company with
evidence of such Person's  corporate (or comparable)  authorization
to convey  Transmission  Assets in exchange  for Member  Units,  in
form and  substance  reasonably  satisfactory  to the Company,  and
(iii)   identified   the   Transmission    Facilities   and   their
Contribution Value.
<PAGE>

(b)   If prior to January 1, 2001,  any Electric  Utility that owns
more  than   incidental   Transmission   Facilities   and  provides
transmission  service  (other than a public  utility  Affiliate  or
owner or  operator  of a  wholesale  merchant  plant (as defined in
Wisconsin  Statutes  Section  196.491(1)(w)))  and that has  (i) made  all
required  filings  with federal and state  regulatory  authorities,
(ii) provided   the  Company   with   evidence  of  such   Person's
corporate  (or  comparable)  authorization  to convey  Transmission
Assets  in  exchange  for  Member  Units,  in  form  and  substance
reasonably  satisfactory to the Company,  and (iii)  identified the
Transmission  Facilities and their  Contribution  Value, shall have
the  right  to  transfer,  prior  to  July  1,  2001,  all  of  its
Transmission  Assets located in the Jurisdictional  Area and become
a Member on the same  terms and  conditions  as a  contribution  of
Transmission  Assets by a public utility  Affiliate under the Asset
Contribution  Agreements and pursuant to Chapter  196.485(5)(b) and
(c)  of   the   Wisconsin   Statutes.   The   retail   distribution
cooperative  members  of any such  Electric  Utility  may  likewise
contribute their incidental  Transmission  Assets, but neither such
Electric  Utilities,   nor  their  members  will  be  permitted  to
purchase  interests   individually  based  upon  their  Load  Ratio
Shares.  However,  any such member may  contribute  its  incidental
Transmission  Assets in  exchange  for Member  Units in  accordance
with the last sentence of Section 3.3(a).

(c)   The value  ascribed to any  Transmission  Assets  contributed
pursuant  to this  Section 3.3 shall be their  Contribution  Value.
The  purchase  price  for  each  Member  Unit  issued  in  exchange
pursuant to this  Section 3.3 shall equal $10;  provided,  however,
that  if  the   Transmission-Dependent   Utility  is  a  Tax-Exempt
Member,  the  purchase  price for each  Member Unit shall equal the
product  of $10  and  the  Tax-Exempt  Investment  Percentage.  The
portion  of the  purchase  price in  excess  of $10 per Unit may be
payable   by  the   contribution   of   Transmission   Assets   (if
appropriate) or cash.

SECTION 3.4     Pre-emptive Rights.
                -------------------

(a)   Purchase of Right.

(i)   Any  Member  that  has   elected  to  receive   distributions
      approximating  100% of its allocable share of Company Profits
      pursuant  to  Section  6.2(c)  may,  in  such  Member's  sole
      discretion,  contribute  cash  to the  Company  in an  amount
      equal to the  amount  determined  in  6.2(d)  for  additional
      Member Units.
<PAGE>

(ii)  Until the IPO, any Transmission-Dependent  Utility shall have
      the right to  maintain  its  initial  Percentage  Interest by
      paying   cash   for   additional   Member   Units   upon  the
      contribution  of additional  Transmission  Assets  located in
      the State of Wisconsin after the Operations Date.

(b)   Member Unit Price.

(i)   The  price  for  Member  Units  issued  pursuant  to  Section
      3.4(a)(i)  shall  equal  the  price  at which  such  Member's
      Member Units were redeemed.

(ii)  The  price  for  Member  Units  issued  pursuant  to  Section
      3.4(a)(ii)  shall  equal the price at which  the  Company  is
      then  issuing  Member  Units to others  that is  causing  the
      dilution;      provided,     however,     that     if     the
      Transmission-Dependent  Utility is a  Tax-Exempt  Member,  it
      shall pay a price  equal to the product of the price at which
      the Company is then issuing  Member Units that is causing the
      dilution and the  Tax-Exempt  Investment  Percentage,  unless
      the price at which the Company is then  issuing  Member Units
      already  includes the Tax-Exempt  Investment  Percentage,  in
      which case the price to the  Tax-Exempt  Member  shall  equal
      the price at which the Company is then issuing Member Units.

(c)   Notice.  Until the IPO,  the  Corporate  Manager  shall  give
prompt   notice  to  each   Tax-Exempt   Member  of  any   proposed
contribution   of   Transmission   Assets   that  would   dilute  a
Tax-Exempt   Member's  interest  and  permit  it  to  maintain  its
Percentage  Interest in accordance with Section  3.4(a)(ii).  If it
desires  to  maintain  its  Percentage  Interest,  such  Tax-Exempt
Member  shall,  within 30 days  thereafter,  advise  the  Corporate
Manager of its intention to purchase additional Member Units.

(d)   Payment  of  Purchase  Price.  Any  additional  Member  Units
purchased   shall  be  paid  for  within  30  days   following  the
contribution  giving  rise to such  right  to  purchase  additional
Units,   but  not  earlier   than  60  days  after  notice  to  the
Tax-Exempt  Members  as  provided  for in  Section  3.4(c)  hereof.
Failure  to  purchase  additional  Member  Units  within  the  time
specified  shall  terminate  a  Member's  rights  pursuant  to this
Section  3.4.  Payment  shall be made by wire  transfer of clearing
house  funds,  if so specified  by the  Company,  and  otherwise by
check payable to the order of the Company.

SECTION 3.5     Contribution of Additional Transmission Assets.
                -----------------------------------------------

(a)   Under  Construction.   Certain  Transmission  Utilities  have
conveyed  Transmission  Assets  under  construction  to the Company
pursuant to the Asset Contribution Agreement.

(i)   The  Company  hereby  undertakes  to use its best  commercial
      efforts  to  complete   such  projects  in  a  timely  manner
      following the Operations Date.

(ii)  If the  contributing  Member  desires  to  complete  any such
      project  on  behalf  of the  Company,  the  Company  and  the
      contributing  Member  agree to  negotiate  in good  faith the
      terms  and  conditions   upon  which  the  project  would  be
      completed by the contributing Member.

(b)   Subsequent  Contributions.  Each Transmission  Utility Member
shall  contribute  or cause to be  contributed  to the  Company any
Transmission  Assets under  construction as of the Operations Date,
but  not  contributed  as of such  date.  The  Transmission  Assets
shall be valued  at their  Contribution  Value,  and  Member  Units
issued in exchange  therefor at a price equal to the  Company's Net
Book  Value per  Member  Unit as of the end of the  calendar  month
preceding such conveyance.
<PAGE>

(c)   Outside  Wisconsin.   Each  Transmission  Utility  Member  or
Affiliate  shall  have  the  right,   within  one  year  after  the
Operations Date, to contribute to the Company  Transmission  Assets
located in  jurisdictions  outside  Wisconsin,  provided  that such
Transmission  Utility  Member or Affiliate  contributes  all of its
Transmission  Assets in such other  jurisdiction.  The Transmission
Assets  shall be valued at their  Contribution  Value,  and  Member
Units  issued in  exchange  therefor  at a price of $10 per  Member
Unit. As a condition to  exercising  such right,  the  contributing
Member  shall  cause to be issued an opinion of counsel  recognized
as  experts  with  respect  to PUHCA  (which  may be counsel to the
Company) that the  contribution  of such assets would not cause any
of the  Members  to  lose  its  exemption  under  PUHCA;  provided,
however,  that this condition  shall not be required  following the
effective date of any repeal of PUHCA.

(d)   Nature  of   Contribution.   The  parties   intend  that  any
contribution  of  Transmission  Assets  after the  Operations  Date
with an unleveraged  Contribution  Value in excess of $3 million in
any  running  12-month  period  shall  be  credited  as if it  were
subject to  indebtedness  in an amount equal to  approximately  50%
of the unleveraged  Contribution  Value of the Transmission  Assets
being  contributed.  To that end, the Company and the  contributing
Member shall  endeavor to agree on an  arrangement  whereby  either
(i) the  contributing  Member incurs  indebtedness and assigns such
indebtedness   to   the   Company,    which   shall   assume   such
indebtedness,   or  (ii)  the  Company  issues   indebtedness   and
distributes,  within  90  days  thereafter,  the  proceeds  to  the
contributing  Member.  The  contributing  Member shall be permitted
to  guarantee  such   indebtedness,   but  shall  not  receive  any
compensation therefor.

(e)   Dispute.  Any dispute regarding  Contribution  Value shall be
resolved pursuant to the Dispute Resolution Provisions.

SECTION 3.6     Voluntary Additional Capital Contributions.
                -------------------------------------------

(a)   No  Member  may be  required  at any time to  contribute  any
additional  amounts or assets to the  Company in excess of that set
forth in Section 3.2, 3.5(b) or 3.8.

(b)   If the Corporate  Manager  determines that additional  equity
capital is required  for Company  operations  and  activities,  and
shall  determine  not to effect  an IPO at that  time or  otherwise
obtain  funding in accordance  with the  provisions of Section 3.7,
the  Corporate  Manager  shall  issue a call  notice to the Members
advising  them of the total  funding that the Company  seeks,  each
Member's  pro  rata  share  thereof   (based  upon  its  Percentage
Interest),  the price per Member  Unit and the date upon which such
voluntary  contributions  are to be payable,  which shall be a date
not less than 45 days subsequent to the date of such notice.

(c)   Each Member shall have the right, but not the obligation,  to
contribute its pro rata share for  additional  Member Units thereof
by giving notice to the Company  within 30 days  following  receipt
of such call  notice  from the  Corporate  Manager.  If fewer  than
all the Members  agree to contribute  their pro rata amounts,  then
the other Members that do  contribute  their pro rata amounts shall
have  the  right  to  contribute   such   additional   amounts  for
additional   Member  Units  in  accordance  with  their  Percentage
Interests    (excluding   the    Percentage    Interests   of   the
non-participating Members).

(d)   Each Member  shall make payment of its portion of the capital
call on or  before  11:00  a.m.,  central  time,  on the due  date.
Payment  shall be made by wire  transfer of clearing  house  funds,
if so  designated  in the  call  notice,  and  otherwise  by  check
payable to the order of the Company.
<PAGE>

(e)   Except as provided in Section 3.4,  3.6(c) or Section 3.7, no
Member shall have the right to make additional  cash  contributions
to the Company after the Operations Date.

SECTION 3.7     Issuance to Corporate Manager.
                ------------------------------

      The Corporate  Manager may contribute  additional  capital to
the  Company,  from time to time,  and  receive  additional  Member
Interests in respect  thereof,  in the manner  contemplated in this
Section 3.7.

(a)   Issuances of Additional Company Interests.

(i)   General.  The  Corporate  Manager  is  hereby  authorized  to
      --------
      cause the Company to issue such additional  Member  Interests
      in the form of Member  Units for any  Company  purpose at any
      time or from  time to  time  to the  Members  (including  the
      Corporate  Manager) for such  consideration and on such terms
      and  conditions  as shall  be  established  by the  Corporate
      Manager in its sole and absolute discretion,  all without the
      approval of any  Members.  Any  additional  Member  Interests
      issued  thereby may be issued in one or more classes,  or one
      or  more   series   of  any  of  such   classes,   with  such
      designations,   preferences   and  relative,   participating,
      optional  or  other  special   rights,   powers  and  duties,
      including   rights,   powers  and  duties  senior  to  Member
      Interests,  all as  shall  be  determined  by  the  Corporate
      Manager in its sole and absolute  discretion  and without the
      approval of any Member,  including  without  limitation,  (i)
      the  allocations  of items of  Company  income,  gain,  loss,
      deduction  and  credit to each such class or series of Member
      Interests;  (ii) the  right of each  such  class or series of
      Member  Interests  to share  in  Company  distributions;  and
      (iii)  the  rights  of each  such  class or  series of Member
      Interests upon  dissolution  and  liquidation of the Company;
      provided,  however, that no additional Member Interests shall
      ---------  --------
      be issued to the Corporate Manager unless:

A.    the  additional  Member  Interests  are issued in  connection
           with  an  issuance  of  Corporate  Shares  of  or  other
           interests  in the  Corporate  Manager,  which  shares or
           interests  have  designations,   preferences  and  other
           rights,   all  such  that  the  economic  interests  are
           substantially  similar to the designations,  preferences
           and other  rights  of the  additional  Member  Interests
           issued  to  the  Corporate  Manager  by the  Company  in
           accordance  with this Section 3.7 and (B) the  Corporate
           Manager  shall  make  a  Capital   Contribution  to  the
           Company  in an amount  equal to the  proceeds  raised in
           connection  with the issuance of such shares of stock of
           or other interests in the Corporate Manager;

B.    the  additional  Member  Interests are issued in exchange for
           property  owned  by the  Corporate  Manager  with a fair
           market value,  as  determined by the Corporate  Manager,
           in  good  faith,  equal  to  the  value  of  the  Member
           Interests; or
<PAGE>

C.    additional  Member  Interests  are  issued to all  Members in
           proportion to their respective Percentage Interests.

Without   limiting  the   foregoing,   the  Corporate   Manager  is
expressly  authorized  to cause the Company to issue  Member  Units
for less than fair market value,  so long as the Corporate  Manager
concludes  in  good  faith  that  such  issuance  is  in  the  best
interests of the Corporate Manager and the Company.

(ii)  Upon  Issuance  of  Additional   Securities.   The  Corporate
      --------------------------------------------
      Manager  shall  not  issue any  additional  Corporate  Shares
      (other than  Corporate  Shares issued in  connection  with an
      exchange pursuant to Section 8.4 hereof) or rights,  options,
      warrants   or   convertible   or   exchangeable    securities
      containing  the right to subscribe for or purchase  Corporate
      Shares (collectively,  "Additional Securities") other than to
      all holders of  Corporate  Shares,  unless (A) the  Corporate
      Manager  shall  cause the  Company to issue to the  Corporate
      Manager  Member  Interests  or rights,  options,  warrants or
      convertible or exchangeable  securities of the Company having
      designations,  preferences  and other  rights,  all such that
      the economic interests are substantially  similar to those of
      the  Additional  Securities,  and (B) the  Corporate  Manager
      contributes   the   proceeds   from  the   issuance  of  such
      Additional   Securities  and  from  any  exercise  of  rights
      contained  in  such  Additional  Securities  to the  Company.
      Without  limiting the  foregoing,  the  Corporate  Manager is
      expressly authorized to issue Additional  Securities for less
      than fair market value,  and to cause the Company to issue to
      the Corporate  Manager  corresponding  Member  Interests,  so
      long as (x) the  Corporate  Manager  concludes  in good faith
      that such issuance is in the best  interests of the Corporate
      Manager and the Company,  including without  limitation,  the
      issuance of Corporate Shares and  corresponding  Member Units
      pursuant to an employee  share  purchase  plan  providing for
      employee  purchases  of Corporate  Shares at a discount  from
      fair market  value or  employee  stock  options  that have an
      exercise  price  that is less than the fair  market  value of
      the  Corporate  Shares,  either at the time of issuance or at
      the  time  of  exercise,   and  (y)  the  Corporate   Manager
      contributes  all proceeds  from such issuance to the Company.
      For  example,  in the  event  the  Corporate  Manager  issues
      Corporate  Shares for a cash purchase  price and  contributes
      all of the  proceeds  of  such  issuance  to the  Company  as
      required  hereunder,  the Corporate Manager shall be issued a
      number of  additional  Member  Units  equal to the product of
      (A)  the  number  of  such  Corporate  Shares  issued  by the
      Corporate   Manager,   the   proceeds   of   which   were  so
      contributed,  multiplied by (B) a fraction,  the numerator of
      which  is  100%,   and  the   denominator  of  which  is  the
      Conversion   Factor   in   effect   on  the   date   of  such
      contribution.

(b)   Certain  Contributions  of Proceeds of Issuance of  Corporate
Shares.  In  connection  with any and all  issuances  of  Corporate
Shares,  the Corporate Manager shall make Capital  Contributions to
the  Company  of  the  proceeds  therefrom,  provided  that  if the
proceeds   actually  received  and  contributed  by  the  Corporate
Manager  are less than the gross  proceeds  of such  issuance  as a
result of any  underwriter's  discount  or other  expenses  paid or
incurred  in  connection  with such  issuance,  then the  Corporate
Manager shall make a Capital  Contribution  of such net proceeds to
the  Company  but shall  receive  additional  Member  Units  with a
value equal to the aggregate  amount of the gross  proceeds of such
issuance   pursuant  to  Section  3.7(a)  hereof.   Upon  any  such
Capital   Contribution  by  the  Corporate  Member,  the  Corporate
Manager's  Capital  Account shall be increased by the actual amount
of its Capital Contribution pursuant to Section 3.9 hereof.
<PAGE>

(c)   Redemption  of Corporate  Shares.  In the event the Corporate
Manager redeems any Corporate  Shares,  then the Corporate  Manager
shall cause the Company to purchase  from the  Corporate  Manager a
number of Member Units as determined  based on the  application  of
the  Conversion  Factor  on  the  same  terms  that  the  Corporate
Manager   redeemed  such  Corporate   Shares.   Moreover,   if  the
Corporate  Manager  makes a cash  tender  offer or  other  offer to
acquire  Corporate  Shares,  then the Corporate Manager shall cause
the  Company  to  make  a  corresponding  offer  to  the  Corporate
Manager  to  acquire  an equal  number of Member  Units held by the
Corporate   Manager.   In  the  event  any  Corporate   Shares  are
redeemed by the  Corporate  Manager  pursuant  to such  offer,  the
Company  shall  redeem  an  equivalent   number  of  the  Corporate
Manager's  Member Units for an equivalent  purchase  price based on
the application of the Conversion Factor.

SECTION 3.8     Adjustment of Tax-Exempt Members' Capital.
                ------------------------------------------

(a)   Whenever  the  Company  changes  the rate that it charges its
customers or upon the  occurrence  of a Capital  Event with respect
to a  Tax-Exempt  Member,  but at least  annually by June 1 of each
year,  the  Company  shall  calculate  the  Tax-Exempt   Investment
Amount  for  each  Tax-Exempt  Member,  as well as such  Tax-Exempt
Member's   aggregate   Capital    Contributions    (including   the
Contribution  Value of any  Transmission  Assets  contributed by it
and any amounts  previously  paid  pursuant to this  Section  3.8),
reduced by any  distributions  pursuant to this Section 3.8 and the
Tax-Exempt  Ownership  Interest  corresponding  to any reduction in
the number of Member  Units held by such  Tax-Exempt  Member  ("Net
Contribution"), and

(i)   If a Member's Net  Contribution  is less than its  Tax-Exempt
      Investment  Amount,  the Member shall pay the  difference  to
      the Company within 30 days of such Notice.

(ii)  If  a  Member's  Net  Contribution   exceeds  its  Tax-Exempt
      Investment  Amount,  the Company shall pay the  difference to
      the  Member  within 30 days of such  notice  and prior to any
      other distributions pursuant to Section 6.2.

(iii) The  Company  may  set  off  any  amounts  owed  to  it  by a
      Tax-Exempt Member against amounts otherwise  distributable to
      it pursuant to Section 6.2.

(b)   The Company  shall  provide each  Tax-Exempt  Member with all
necessary  work papers used to compute  the  Tax-Exempt  Investment
Amount and Net  Contribution  of each Member.  Such  amounts  shall
be  determined  consistent  with the  terms of this  Agreement,  as
illustrated  in Schedule B. The  Tax-Exempt  Investment  Amount for
                -----------
each  Tax-Exempt  Member shall be  determined by  multiplying  each
Member's   Tax-Exempt   Ownership   Interest   by  the   Tax-Exempt
Investment Percentage.
<PAGE>

(c)   If a  Tax-Exempt  Member does not make a payment  required of
it in accordance with this Section,  and  arrangements are not made
with  respect  to the  set-off of such  amounts  due,  the  Company
shall reduce the Percentage  Interest of the  Tax-Exempt  Member to
reflect its Net Contribution.

SECTION 3.9     Capital Accounts.
                -----------------

(a)   A separate  capital  account (a "Capital  Account")  shall be
established  and  maintained  for each  Member in  accordance  with
Regulations   Section   1.704-1(b)(2)(iv).   Without  limiting  the
foregoing,  Capital  Accounts  shall be  maintained  in  accordance
with  the  following  provisions:  (i)  to  each  Member's  Capital
Account   there  shall  be  credited  such  Member's  cash  Capital
Contributions,  the Contribution  Value of any Transmission  Assets
contributed  by it,  such  Member's  distributive  share of Profits
and any items in the nature of income or gain  which are  specially
allocated  pursuant to Section 6.1(b),  (c) or (d) hereof,  and the
amount of any Company  liabilities  assumed by such Member or which
are secured by any Company asset  distributed to such Member,  (ii)
to each  Member's  Capital  Account  there  shall  be  debited  the
amount  of cash and the fair  market  value  as  determined  by the
Corporate  Manager,  of  any  Company  asset  distributed  to  such
Member pursuant to any provision of this  Agreement,  such Member's
distributive  share  of  Losses  and any  items  in the  nature  of
expenses  or  losses  which are  specially  allocated  pursuant  to
Section  6.1(b),   (c)  or  (d)  hereof,  and  the  amount  of  any
liabilities  of such  Member  assumed  by the  Company  or that are
secured by any asset  contributed  by such  Member to the  Company.
The  foregoing   provisions  and  the  other   provisions  of  this
Agreement  relating  to the  maintenance  of Capital  Accounts  are
intended to comply with Regulations Section  1.704-1(b),  and shall
be  interpreted  and  applied  in a  manner  consistent  with  such
Regulations,  and any  dispute  among the  Company  and the Members
shall be resolved pursuant to the Dispute Resolution Provisions.

(b)   When  a  new  or  existing   Member  acquires  an  additional
Membership  Interest,  the Corporate  Manager  shall  determine the
potential  "Adjustment  in  Value"  by  multiplying  the  Company's
unrealized  gain  or  loss   (calculated  by  multiplying   (x) the
difference  between  (A) the  Net Book  Value and  (B) the  implied
value of the  Company,  based  upon the  price per  Member  Unit of
Member  Units  issued in exchange  for such  additional  Membership
Interest  times the total  number of Member Units  outstanding,  by
(y) the   difference   between  the   contributing   Member's   new
Percentage Interest and its previous Percentage Interest, if any).

(i)   If  a  new  or  existing   Member   acquires  an   additional
      Membership   Interest,   and  (A) the   resulting   potential
      Adjustment  in Value  exceeds  3% of the Net Book  Value,  or
      (B) if the aggregate  Adjustment  in Value  measured from the
      time of the  most  recent  adjustment  exceeds  3% of the Net
      Book Value, the Corporate  Manager shall revalue the property
      of the Company to its fair  market  value (as  determined  by
      the Corporate  Manager,  and taking into account Code Section
      7701(g))   in    accordance    with    Regulations    Section
      1.704-1(b)(2)(iv)(f).
<PAGE>

(ii)  If  (A) a  new or  existing  Member  acquires  an  additional
      Membership  Interest in  exchange  for more than a de minimis
                                                         ----------
      Capital  Contribution  that  is  not  covered  by  3.9(b)(i),
      (B) the  Company  distributes  to a  Member  more  than  a de
                                                                 --
      minimis  amount of Company  property as  consideration  for a
      -------
      the meaning of Regulations Section 1.704-1(b)(2)(ii)(g),  the
      Corporate  Manager may, in its sole and absolute  discretion,
      revalue the  property of the Company to its fair market value
      (as  determined  by the  Corporate  Manager,  in its sole and
      absolute  discretion,  and taking into  account  Code Section
      7701(g))   in    accordance    with    Regulations    Section
      1.704-1(b)(2)(iv)(f).

(iii) When the  Company's  property is  revalued  by the  Corporate
      Manager,  the  Capital  Accounts  of  the  Members  shall  be
      adjusted   in   accordance    with    Regulations    Sections
      1.704-1(b)(2)(iv)(f)  and (g), which  generally  require such
      Capital  Accounts  to be  adjusted  to reflect  the manner in
      which the  unrealized  gain or loss inherent in such property
      (that  has  not  been  reflected  in  the  Capital   Accounts
      previously)  would be allocated among the Members pursuant to
      Section  6.1 if  there  were a  taxable  disposition  of such
      property  for its fair  market  value (as  determined  by the
      Corporate Manager, in its sole and absolute  discretion,  and
      taking into account Code Section  7701(g)) on the date of the
      revaluation.

SECTION 3.10     Initial Debt Financing.
                 ------------------------

(a)   The Company  shall use its best  efforts to issue,  within 90
days  following the  Operations  Date,  long-term debt in an amount
equal to approximately 50% of its total initial capitalization.

(b)   Within  90 days of the  closing  of such  financing,  the net
proceeds  of such  financing  shall be  distributed  to the Members
that  contributed  Transmission  Assets in  accordance  with  their
respective  Percentage  Interests,   exclusive  of  the  Percentage
Interests  held by  Members  that did not  contribute  Transmission
Assets,  and the  Corporate  Manager shall redeem Member Units with
such  proceeds  and  shall  revise   Schedule  A  to  reflect  such
                                     -----------
distribution.   Member  Units  redeemed  shall  be  valued  at  the
initial value, as set forth in the definition of Member Unit.

SECTION 3.11     No Interest.
                 ------------

      No interest shall be paid on Capital  Contributions or on the
balance in each Member's Capital Account.

SECTION 3.12    No Third Party Beneficiary.
                ----------------------------

      No creditor or other third  party  having  dealings  with the
Company  shall  have the right to enforce  the right or  obligation
of any Member to make Capital  Contributions  or loans or to pursue
any other  right or remedy  hereunder  or at law or in  equity,  it
being  understood  and agreed that the provisions of this Agreement
shall be solely  for the  benefit  of, and may be  enforced  solely
by,  the  parties  hereto  and  their  respective   successors  and
assigns.  None of the rights or  obligations  of the Members herein
set forth to make  Capital  Contributions  shall be deemed an asset
of the  Company  for any  purpose by any  creditor  or other  third
party,  nor may such rights or obligations be sold,  transferred or
<PAGE>

assigned  by the  Company or pledged or  encumbered  by the Company
to secure  any debt or other  obligation  of the  Company or of any
of the  Members.  In  addition,  it is the  intent  of the  parties
hereto  that no  distribution  to any  Member  shall  be  deemed  a
return  of  money  or  other  property  in  violation  of the  Act.
However,  if  any  court  of  competent  jurisdiction  holds  that,
notwithstanding  the  provisions of this  Agreement,  any Member is
obligated to return such money or property,  such obligation  shall
be  the  obligation  of  such  Member  and  not  of  the  Corporate
Manager.  Without  limiting  the  generality  of the  foregoing,  a
deficit  Capital  Account  of a Member  shall not be deemed to be a
liability of such Member or an asset or property of the Company.

SECTION 3.13    Membership Units as Securities.
                -------------------------------

      Membership  Units  will  not be  evidenced  by  certificates,
writings,  instruments or other  documents.  Membership Units shall
be deemed to be  "securities"  as that term is  defined  in Article
8.  The  creation  and   perfection  of  a  security   interest  in
Membership Units will be governed by Article 8.

SECTION 3.14    Month-End Convention.
                ----------------------

      For purposes of this  Agreement,  all Capital  Contributions,
other than the initial  Capital  Contributions,  shall be deemed to
be  received  at the end of the month in which  they  actually  are
received by the Company.

                                   ARTICLE IV

                             RIGHTS, OBLIGATIONS AND
                         POWERS OF THE CORPORATE MANAGER

SECTION 4.1     Management of the Company.
                --------------------------

(a)   Except as  otherwise  expressly  provided in this  Agreement,
the  Corporate  Manager  shall have full,  complete  and  exclusive
discretion  to manage and control  the  business of the Company for
the  purposes   herein   stated,   and  shall  make  all  decisions
affecting  the business  and assets of the Company.  Subject to the
restrictions  specifically contained in this Agreement,  the powers
of the Corporate  Manager shall include,  without  limitation,  the
authority  to  take  all  actions  on  behalf  of  the  Company  as
provided  in Section  2.4 and to take such other  action,  execute,
acknowledge,   swear  to  or  deliver  such  other   documents  and
instruments,   and   perform  any  and  all  other  acts  that  the
Corporate   Manager  deems   necessary  or   appropriate   for  the
formation,  continuation  and conduct of the  business  and affairs
of the Company.  The  Corporate  Manager shall have all powers as a
manager  under the Act to do all things  necessary  and  convenient
to  carry  out  the  Company's   business  to  the  fullest  extent
provided by the Act.

(b)   Except  as  otherwise  provided  herein,  to the  extent  the
duties of the Corporate  Manager  require  expenditures of funds to
be paid to third  parties,  the  Corporate  Manager  shall not have
any obligations  hereunder  except to the extent that Company funds
are  reasonably  available  to  it  for  the  performance  of  such
duties,  and nothing herein  contained shall be deemed to authorize
or require the  Corporate  Manager,  in its  capacity  as such,  to
expend its  individual  funds for  payment  to third  parties or to
undertake any  individual  liability or obligation on behalf of the
Company.
<PAGE>

SECTION 4.2     Authority of Corporate Manager.
                -------------------------------

      Subject to  applicable  regulatory  approvals,  the Corporate
Manager may appoint,  employ,  contract or otherwise  deal with any
Person for the  transaction  of the business of the Company,  which
Person may,  under  supervision of the Corporate  Manager,  perform
any acts or services for the Company as the  Corporate  Manager may
approve.  Without  limiting the  foregoing,  the Corporate  Manager
is  specifically  authorized  to execute  on behalf of the  Company
various  agreements  with the  Members,  including  Closing  Escrow
Agreements,    Asset    Contribution    Agreements,    Subscription
Agreements,  Attachment Agreements,  Service Agreements for Network
Integration   Transmission   Service,   Operation  and  Maintenance
Agreements,  Transitional  Services  Agreements,  Network Operating
Agreements,  Bills of Sale,  Bill of Sale and Right of  Repurchase,
Generation-Transmission         Interconnection         Agreements,
Transmission-Distribution   Interconnection   Agreements,  and  any
other   agreements   relating   to  the   acquisition,   ownership,
operation  and  maintenance  of the  Transmission  Assets,  and any
amendments thereto as the Corporate Manager deems appropriate.

SECTION 4.3     Indemnification and Exculpation of Indemnitees.
                -----------------------------------------------

(a)   The Company shall  indemnify an  Indemnitee  from and against
any   and   all   expenses    (including   fees,   costs   charges,
disbursements,  attorneys fees and any other  expenses  incurred in
connection  with  a  proceeding)  and  liabilities  (including  any
obligation  to pay a  judgment,  settlement,  penalty,  assessment,
forfeiture  or fine,  including an excise tax assessed with respect
to an employee  benefit  plan,  and  reasonable  expenses)  arising
from any and all claims,  demands,  actions,  suits or proceedings,
civil,  criminal,  administrative or investigative,  that relate to
the  operations  of the  Company  in which  any  Indemnitee  may be
involved,   or  is  threatened  to  be  involved,  as  a  party  or
otherwise,  unless  it is  established  that:  (i)  the  Indemnitee
failed  to  deal   fairly  with  the  Company  or  its  Members  in
connection  with a matter in which the  Indemnitee  has a  material
conflict of interest;  (ii) the Indemnitee  violated  criminal law,
unless the  Indemnitee  had  reasonable  cause to believe  that its
conduct was lawful or had no  reasonable  cause to believe that the
conduct was  unlawful;  (iii) the matter  relates to a  transaction
from which the Indemnitee  derived an improper  personal profit; or
(iv)  the   Indemnitee   engaged   in   willful   misconduct.   The
termination  of any  proceeding  by judgment,  order or  settlement
does not  create a  presumption  that the  Indemnitee  did not meet
the  requisite  standard  of  conduct  set  forth  in this  Section
4.3(a).  The  termination  of any  proceeding by conviction or upon
a plea of nolo  contendere  or its  equivalent,  or an  entry of an
order  of  probation  prior  to  judgment,   creates  a  rebuttable
presumption  that the  Indemnitee  acted in a  manner  contrary  to
that  specified  in  this  Section  4.3(a).   Any   indemnification
pursuant  to this  Section  4.3(a)  shall  be made  only out of the
assets of the Company.

(b)   The  Company  may  reimburse  an  Indemnitee  for  reasonable
expenses  incurred by an Indemnitee  who is a party to a proceeding
in  advance  of  the  final  disposition  of  the  proceeding  upon
receipt  by  the  Company  of  (i) a  written  affirmation  by  the
Indemnitee  of  the   Indemnitee's   good  faith  belief  that  the
<PAGE>

standard of conduct  necessary for  indemnification  by the Company
as  authorized  in  this  Section  4.3 has  been  met,  and  (ii) a
written  undertaking  by or on  behalf of the  Indemnitee  to repay
the amount if it shall  ultimately be determined  that the standard
of conduct has not been met.

(c)   The indemnification  provided by this Section 4.3 shall be in
addition to any other  rights to which an  Indemnitee  or any other
Person may be entitled  under any  agreement,  pursuant to any vote
of  the  Members,  as a  matter  of  law or  otherwise,  and  shall
continue  as to an  Indemnitee  who has  ceased  to  serve  in such
capacity.

(d)   The Company may purchase and  maintain  insurance,  on behalf
of  the  Indemnitees  and  such  other  Persons  as  the  Corporate
Manager  shall  determine,   against  any  liability  that  may  be
asserted  against or  expenses  that may be incurred by such Person
in  connection  with  the  Company's   activities,   regardless  of
whether the Company  would have the power to indemnify  such Person
against such liability under the provisions of this Agreement.

(e)   For  purposes  of this  Section  4.3,  the  Company  shall be
deemed to have  requested  an  Indemnitee  to serve as fiduciary of
an employee  benefit  plan  whenever the  performance  by it of its
duties  to  the  Company  or the  Corporate  Manager  also  imposes
duties on, or  otherwise  involves  services  by, it to the plan or
participants or  beneficiaries  of the plan;  excise taxes assessed
on  an  Indemnitee  with  respect  to  an  employee   benefit  plan
pursuant  to  applicable  law shall  constitute  fines  within  the
meaning of this Section  4.3;  and actions  taken or omitted by the
Indemnitee  with  respect  to  an  employee  benefit  plan  in  the
performance of its duties for a purpose  reasonably  believed by it
to be in the  interest of the  participants  and  beneficiaries  of
the plan  shall be deemed to be for a purpose  that is not  opposed
to the best interests of the Company.

(f)   In no  event  may  an  Indemnitee  subject  the  Non-Managing
Members  to  personal  liability  by reason of the  indemnification
provisions set forth in this Agreement.

(g)   An Indemnitee  shall not be denied  indemnification  in whole
or in part under this  Section 4.3 because  the  Indemnitee  had an
interest   in  the   transaction   with   respect   to  which   the
indemnification   applies   if  the   transaction   was   otherwise
permitted by the terms of this Agreement.

(h)   The  provisions  of this  Section  4.3 are for the benefit of
the   Indemnitees,    their   heirs,   successors,    assigns   and
administrators  and shall not be deemed to create  any  rights  for
the benefit of any other Persons.

(i)   Any amendment,  modification or repeal of this Section 4.3 or
any  provision  hereof shall be  prospective  only and shall not in
any  way  affect  the  indemnification  of  an  Indemnitee  by  the
Company  under this Section 4.3 as in effect  immediately  prior to
such  amendment,  modification  or repeal  with  respect to matters
occurring,   in  whole  or  in  part,   prior  to  such  amendment,
modification  or repeal,  regardless  of when  claims  relating  to
such matters may arise or be asserted.
<PAGE>

SECTION 4.4     Liability of the Corporate Manager.
                -----------------------------------

(a)   Notwithstanding  anything to the  contrary  set forth in this
Agreement,  the Corporate  Manager shall not be liable for monetary
damages to the  Company or any  Members  for  losses  sustained  or
liabilities   incurred   as  a  result  of  actions  or   omissions
consistent  with the  standard  to which  directors  of a Wisconsin
corporation  are  held.  The  Corporate  Manager  shall  not  be in
breach  of any  duty  that  the  Corporate  Manager  may owe to the
Non-Managing  Members  or the  Company or any other  Persons  under
this  Agreement  or of any duty  stated or implied by law or equity
provided the  Corporate  Manager,  acting in good faith,  abides by
the terms of this Agreement.

(b)   The  Non-Managing  Members  expressly  acknowledge  that  the
Corporate  Manager  is  acting on  behalf  of the  Company  and the
Corporate Manager's shareholders  collectively,  that the Corporate
Manager is under no obligation  to consider the separate  interests
of the Non-Managing  Members (including,  without  limitation,  the
tax  consequences to Non-Managing  Members or the tax  consequences
of some,  but not all,  of the  Non-Managing  Members)  in deciding
whether  to cause  the  Company  to take (or  decline  to take) any
actions.  In the event of a conflict  between the  interests of the
shareholders  of  the  Corporate   Manager  on  one  hand  and  the
Non-Managing  Members on the other,  the  Corporate  Manager  shall
endeavor  in good  faith to resolve  the  conflict.  The  Corporate
Manager  shall  not be  liable  for  monetary  damages  for  losses
sustained,   liabilities   incurred  or  benefits  not  derived  by
Non-Managing  Members in connection with such  decisions,  provided
that the Corporate Manager has acted in good faith.

(c)   Subject to its  obligations  and duties as Corporate  Manager
set  forth  in  Section  4.1  hereof,  the  Corporate  Manager  may
exercise any of the powers  granted to it under this  Agreement and
perform  any  of  the  duties  imposed  upon  it  hereunder  either
directly  or  by or  through  its  agents.  The  Corporate  Manager
shall not be  responsible  for any  misconduct or negligence on the
part of any such agent appointed by it in good faith.

(d)   Notwithstanding  any other  provisions  of this  Agreement or
the Act,  any  action  of the  Corporate  Manager  on behalf of the
Company or any  decision of the  Corporate  Manager to refrain from
acting on  behalf  of the  Company,  undertaken  in the good  faith
belief that such action or omission is  necessary  or  advisable in
order to protect  the  ability of the  Company  to  continue  to be
classified  as a  partnership  for federal,  state and local income
tax purposes,  is expressly  authorized under this Agreement and is
deemed approved by all of the Non-Managing Members.

(e)   Any amendment,  modification or repeal of this Section 4.4 or
any  provision  hereof shall be  prospective  only and shall not in
any  way  affect  the   limitations  on  the  Corporate   Manager's
liability to the Company and the  Non-Managing  Members  under this
Section  4.4 as in  effect  immediately  prior  to such  amendment,
modification  or repeal  with  respect  to  matters  occurring,  in
whole  or  in  part,  prior  to  such  amendment,  modification  or
repeal,  regardless  of when claims  relating  to such  matters may
arise or be asserted.
<PAGE>

SECTION 4.5     Corporate Expenses and Administrative Expenses.
                -----------------------------------------------
(a)   Except as provided in this Section 4.5 and  elsewhere in this
Agreement   (including  the  provisions  of  Article  VI  regarding
distributions,   payments  and  allocations  to  which  it  may  be
entitled),  the Corporate  Manager shall not be compensated for its
services as Corporate Manager of the Company.

(b)   Subject  to  Section   4.6,   all   Corporate   Expenses  and
Administrative  Expenses shall be  obligations of the Company,  and
the  Corporate  Manager shall be entitled to  reimbursement  by the
Company  for any  expenditure  (including  Corporate  Expenses  and
Administrative  Expenses)  incurred  by it on behalf of the Company
that shall be made other than out of the funds of the Company.

SECTION 4.6     Outside Activities.
                --------------------

      The  Corporate  Manager's  activities  shall  be  limited  to
serving as Corporate Manager of the Company and its Subsidiaries.

SECTION 4.7     Title to Company Assets.
                ------------------------

      Except to the extent that the  Corporate  Manager may possess
a  nominal  fractional   undivided  interest  in  the  Transmission
Assets,  title to Company assets,  whether real,  personal or mixed
and  whether  tangible or  intangible,  shall be deemed to be owned
by the  Company  as an  entity,  and  no  Member,  individually  or
collectively,  shall have any  ownership  interest in such  Company
assets  or  any  portion  thereof.  Title  to  any  or  all  of the
Company  assets  may  be  acquired  and  held  in the  name  of the
Company  or for  the  account  of  the  Company,  by the  Corporate
Manager  or one or more  nominees,  as the  Corporate  Manager  may
determine.  The  Corporate  Manager  hereby  declares  and warrants
that any  Company  assets for which legal title is held in the name
of  the  Corporate  Manager  or any  nominee  or  Affiliate  of the
Corporate  Manager  shall be property of the Company  under Section
183.0701  of the Act and  shall  be held by the  Corporate  Manager
for the  exclusive  use and  benefit of the  Company in  accordance
with the  provisions of this  Agreement.  All Company  assets shall
be  recorded  as the  property  of the  Company  in its  books  and
records,  irrespective  of the names in which  legal  title to such
Company assets are held.

                                   ARTICLE V

                       ACCOUNTING, TAX AND FISCAL MATTERS

SECTION 5.1     Fiscal and Taxable Year.
                ------------------------

      The  Company  hereby  adopts  the  calendar  year,  January 1
through  and  including  December  31, as its  fiscal and tax year,
except as otherwise may be required by Code Section 706.
<PAGE>

SECTION 5.2     Books.
                ------

      The  books  and  records  of the  Company  shall  be  kept in
accordance  with usual and  customary  accounting  practices on the
accrual method and in accordance  with GAAP,  FERC's Uniform System
of Accounts, and applicable tax requirements.

SECTION 5.3     Records.
                --------

(a)   The  Company  shall keep at its  principal  place of business
all of the following:

(i)   A list, kept in alphabetical  order, of each past and present
      Member  and  manager.  The list shall  include  the full name
      and  last-known  mailing  address of each  Member or manager,
      the date on which the person  became a Member or manager  and
      the date, if  applicable,  on which the Person ceased to be a
      Member or manager.

(ii)  A copy of the  Company's  articles  of  organization  and all
      amendments to the articles.

(iii) Copies of the  Company's  federal,  state and local income or
      franchise tax returns and financial  statements,  if any, for
      the  four  most  recent   years  or,  if  such   returns  and
      statements  are not  prepared  for any reason,  copies of the
      information and statements  provided to, or which should have
      been  provided  to,  the  Members  to enable  them to prepare
      their  federal,  state and local  income tax  returns for the
      four most recent years.

(iv)  Copies  of this  Agreement,  all  amendments  hereto  and any
      operating agreements no longer in effect.

(b)   Upon  reasonable  request,  a Member may, at the Member's own
expense,  inspect and copy during  ordinary  business hours (i) any
Company record required to be kept under Section  5.3(a);  and (ii)
Company  work papers  pertaining  to the  determination  of the (A)
number  of  Member  Units to be  issued  to each  Member  as of the
Operations Date, and (B) Tax-Exempt Investment Amount.

(c)   The Corporate  Manager shall provide,  to the extent that the
circumstances  render  it  just  and  reasonable,   true  and  full
information  of all things  affecting  the Members,  including  any
records  relating to the  Transmission  Assets  contributed by such
Member,  to  any  Member  or to  the  legal  representative  of any
Member  upon  reasonable   request  of  the  Member  or  the  legal
representative.

(d)   The  failure of the  Company to keep or  maintain  any of the
records or  information  required  under this Section  shall not be
grounds  for  imposing  liability  on any  Person for the debts and
obligations of the Company.

SECTION 5.4     Company Funds.
                --------------

      The  funds  of the  Company  shall be kept in the name of the
Company in one or more  separate  bank accounts with banks or trust
companies as selected by the Corporate  Manager.  Withdrawals  from
such bank  accounts  shall be made only by Persons  approved by the
Corporate Manager.
<PAGE>

SECTION 5.5     Tax Returns.
                -------------

(a)   The Corporate  Manager shall cause the Company to timely file
all  Company  income  tax  returns  required  to be  filed  by  the
jurisdictions  in which the  Company  conducts  business or derives
income.  By June 30 of  each  year,  the  Corporate  Manager  shall
cause to be  furnished  to each Person who was a Member  during the
prior  fiscal  year  all   available   information   necessary  for
inclusion in such person's income tax returns for such year.

(b)   Within 45 days following the end of each fiscal quarter,  the
Corporate  Manager  shall cause to be  forwarded to each Person who
was a Member  during such quarter,  a statement  setting forth such
Member's  share  of  taxable  income  for  such  quarter,  it being
understood  that all such numbers  shall be  estimates  and subject
to year-end  adjustment,  and the  Corporate  Manager shall have no
liability  with  respect  to such  numbers  as  long  as they  were
provided in good faith.

SECTION 5.6     Tax Elections.
                --------------

(a)   The  Members   intend  that  the  Company  be  treated  as  a
partnership  for U.S.  federal  income  tax  purposes.  Absent  the
unanimous vote of the  Non-Managing  Members,  no election shall be
made by the  Company or any  Member  for the  Company to be treated
as a  corporation,  or an  association  taxable  as a  corporation,
under the Code or any provisions of any state or local laws.

(b)   Subject to Section 5.6(a),  the Corporate  Manager shall have
the right, in its sole discretion but after  consultation  with the
Members  affected  thereby,  at any  time  to  make  or not to make
elections   for  income  tax  purposes   that  are   authorized  or
permitted by any law or regulation (including Code Section 754).

SECTION 5.7     Tax  Matters,  Tax  Elections  and  Special  Basis
                ---------------------------------------------------
Adjustments.
------------

      ATC  Management  Inc. shall be the initial tax matters member
(the "Tax  Matters  Member") of the  Company  within the meaning of
Code  Section  6231.  The Tax Matters  Member  shall have the right
and  obligation  to  take  all  actions  authorized  and  required,
respectively,  by the Code for the Tax  Matters  Member,  and shall
manage  any  administrative   tax  proceedings   conducted  at  the
Company  level by the  Internal  Revenue  Service  with  respect to
Company  matters.  All  expenses  and  fees  incurred  by  the  Tax
Matters  Member on behalf of the Company not  otherwise  reimbursed
shall constitute Corporate Expenses.

      Subject  to  the   provisions   of  Section  5.6,  all  other
elections  required or  permitted  to be made by the Company  under
the Code may be made by the Tax Matters  Member in accordance  with
any tax  agreement  among the  Members  or in the  absence  of such
agreement,  in  such  manner  as  determined  by  the  Tax  Matters
Member,  in  the  exercise  of  its  reasonable   discretion,   and
permitted by the provisions of the Code.
<PAGE>

SECTION 5.8     Access to Records.
                -------------------

      Each Member  agrees to provide the  Company  with  reasonable
access to such  Member's  books and records as they  pertain to the
Transmission Assets contributed by such Member.

                                   ARTICLE VI

                          ALLOCATIONS AND DISTRIBUTIONS

SECTION 6.1     Allocations.
                ------------

(a)   Profit  and  Loss.  Profit  and Loss of the  Company  of each
      ------------------
fiscal year of the  Company  shall be  allocated  to the Members in
accordance with their respective Percentage Interests.

(b)   Minimum Gain  Chargeback.  Notwithstanding  any  provision to
      -------------------------
the   contrary,   (i)  any  expense  of  the  Company   that  is  a
"nonrecourse  deduction" within the meaning of Regulations  Section
1.704-2(b)(1)  shall be allocated in  accordance  with the Members'
respective  Percentage  Interests,  (ii) any expense of the Company
that is a "partner  nonrecourse  deduction"  within the  meaning of
Regulations  Section   1.704-2(i)(2)  shall  be  allocated  to  the
Member  that bears the  "economic  risk of loss" of such  deduction
in accordance  with  Regulations  Section  1.704-2(i)(1),  (iii) if
there  is a  net  decrease  in  Company  Minimum  Gain  within  the
meaning  of  Regulations  Section  1.704-2(f)(1)  for  any  Company
taxable  year,  then,  subject  to  the  exceptions  set  forth  in
Regulations Section  1.704-2(f)(2),(3),  (4) and (5), items of gain
and income  shall be  allocated  among the  Members  in  accordance
with  Regulations   Section   1.704-2(f)  and  the  ordering  rules
contained in Regulations Section  1.704-2(j),  and (iv) if there is
a net decrease in Member  Nonrecourse  Debt Minimum Gain within the
meaning  of  Regulations  Section  1.704-2(i)(4)  for  any  Company
taxable  year,  then,  subject  to  the  exceptions  set  forth  in
Regulations  Section  1.704(2)(g),  items of gain and income  shall
be  allocated  among the  Members in  accordance  with  Regulations
Section   1.704-2(i)(4)   and  the  ordering  rules   contained  in
Regulations   Section   1.704-2(j).   A   Member's   "interest   in
partnership  profits" for purposes of determining  its share of the
nonrecourse  liabilities  of the  Company  within  the  meaning  of
Regulations   Section   1.752-3(a)(3)   shall   be  such   Member's
Percentage Interest.

(c)   Qualified  Income  Offset.   If  a  Member  receives  in  any
      --------------------------
taxable year an adjustment,  allocation or  distribution  described
in   subparagraphs   (4),  (5)  or  (6)  of   Regulations   Section
1.704-1(b)(2)(ii)(d)  that causes or  increases  a deficit  balance
in such  Member's  Capital  Account  that  exceeds  the sum of such
Member's  shares of Company  Minimum  Gain and  Member  Nonrecourse
Debt Minimum Gain, as  determined  in accordance  with  Regulations
Sections   1.704-2(g)   and   1.704-2(i),   such  Member  shall  be
allocated  specially  for such  taxable  year (and,  if  necessary,
later  taxable  years)  items of income  and gain in an amount  and
manner   sufficient  to  eliminate  such  deficit  Capital  Account
balance as quickly as possible as provided in  Regulations  Section
1.704-1(b)(2)(ii)(d).  After the  occurrence  of an  allocation  of
income  or  gain  to a  Member  in  accordance  with  this  Section
6.1(c),   to  the   extent   permitted   by   Regulations   Section
1.704-1(b),  items of expense or loss  shall be  allocated  to such
Member  in an  amount  necessary  to  offset  the  income  or  gain
previously allocated to such Member under this Section 6.1(c).
<PAGE>

(d)   Capital  Account  Deficits.  Loss shall not be allocated to a
      ---------------------------
Member to the extent  that such  allocation  would  cause a deficit
in such Member's  Capital  Account (after  reduction to reflect the
items  described in  Regulations  Section  1.704-1(b)(2)(ii)(d)(4),
(5) and (6)) to exceed the sum of such  Member's  shares of Company
Minimum Gain and Member  Nonrecourse  Debt Minimum  Gain.  Any Loss
in  excess  of that  limitation  shall be  allocated  to the  other
Members   in   accordance   with   their   respective    Percentage
Interests.  After  the  occurrence  of an  allocation  of Loss to a
Member  in  accordance  with this  Section  6.1(d),  to the  extent
permitted  by  Regulations  Section  1.704-1(b),  Profit  shall  be
allocated  to such  Member in an  amount  necessary  to offset  the
Loss  previously  allocated  to  each  Member  under  this  Section
6.1(d).

(e)   Varying  Interests.  If a Member transfers any part or all of
      -------------------
its Membership  Interest  during a fiscal year of the Company,  the
distributive  shares  of the  various  items  of  Profit  and  Loss
allocable  among the  Members  during  such  fiscal  year  shall be
allocated  between the transferor and the transferee  Member either
(i) as if the  Company's  fiscal  year had ended on the date of the
transfer  or  (ii) based  on the number of days of such fiscal year
that each was a Member.  If the Members'  Percentage  Interests are
adjusted  during a fiscal  year of the  Company,  the  Profits  and
Losses for such  fiscal  year shall be  allocated  between the part
of the year  ending on the day when the  adjustment  occurs and the
part of the year  beginning on the  following  day either (i) as if
the  taxable  year  had  ended  on the  date of the  adjustment  or
(ii) based  on the number of days in each part.  The  allocation of
Profits  and  Losses  for the  earlier  part of the  year  shall be
based  on the  Percentage  Interests  before  adjustment,  and  the
allocation  of  Profits  and  Losses  for the later  part  shall be
based  on  the  adjusted   Percentage   Interests.   The  Corporate
Manager,  in its  sole and  absolute  discretion,  shall  determine
which method shall be used to allocate the  distributive  shares of
the various items of Profit and Loss.

(f)   Definition  of Profit and Loss.  "Profit"  and "Loss" and any
      -------------------------------
items  of  income,  gain,  expense  or  loss  referred  to in  this
Agreement  shall  mean  the  Company's  book  income  or  loss,  as
determined   in   accordance   with  FERC  Books  of  Accounts  and
consistent with the principles of maintaining  Capital  Accounts in
accordance  with  Regulations  Section  1.704-1(b)(2)(iv),   except
that  Profit and Loss shall not include  items of income,  gain and
expense that are specially  allocated  pursuant to Sections 6.1(b),
6.1(c) or 6.1(d).  All  allocations of income,  profit,  gain, loss
and expense (and all items  contained  therein) for federal  income
tax purposes  shall be identical to all  allocations  of such items
set forth in this  Section  6.1,  except as  otherwise  required by
Code Section  704(c) and  Regulations  Section  1.704-1(b)(4).  The
Corporate  Manager,  in consultation with the Members,  shall elect
the  initial  methods  for  allocating  items of  income,  gain and
expense as required  by Code  Section  704(c)  with  respect to the
properties   acquired  by  the   Company   pursuant  to  the  Asset
Contribution  Agreements.  With  respect  to  (i) other  properties
acquired by the Company and (ii) any  amounts  required to be taken
into  account  using  Code  Section  704(c)  principles  due  to  a
revaluation  of Company  assets  pursuant  to Section  3.9(b),  the
Corporate  Manager  shall  have  the  authority,   as  provided  in
Section  5.6,  to elect the  method to be used by the  Company  for
allocating  items of income,  gain and  expense as required by Code
Section 704(c) with respect to such  properties,  and such election
shall be binding on all Members.
<PAGE>

SECTION 6.2     Cash Available for Distribution.
                --------------------------------

(a)   Distributions  of  Cash  Available  for  Distribution  to the
Members  shall  be  made  in  accordance   with  their   respective
Percentage  Interests  and at such times and in such amounts as the
Corporate Manager shall determine.

(i)   The Corporate Manager hereby declares its intention,  subject
      to the  requirements of the Act, to distribute Cash Available
      for  Distribution  to the Members on a quarterly  basis in an
      amount  approximating  80% of the Company's  Profits for such
      quarter.

(ii)  Until the IPO,  the record date for a  distribution  shall be
      at the end of a quarter of a fiscal year of the Company,  and
      the  payment  date  within 15 days  thereafter.  Upon an IPO,
      the  Corporate  Manager  shall  set  such  record  dates  and
      payment dates as may be required or  appropriate,  consistent
      with the distribution of cash on a quarterly basis.

(b)   Any  Member  that  loses the right to use  Equity  Accounting
may, prior to October 1 of any year,  notify the Corporate  Manager
that such  Member has  elected to  receive a  distribution  of Cash
Available for  Distribution  equal to 100% of its  allocable  share
of the  Company's  Profits  for that year.  Any Member may  provide
the  Corporate  Manager with standing  instructions  to that effect
that shall prevail unless and until revoked by such Member.

(c)   For any year  during  which a Member's  election  pursuant to
Section 6.2(b) is in effect,  the Corporate  Manager will,  subject
to the  requirements  of the Act  and  Section  6.2(f),  distribute
Cash  Available  for  Distribution  to such Member during that year
in an amount  approximating  100% of such Member's  allocable share
of Profits for the year.

(d)   Any amounts  received by a Member  pursuant to Section 6.2(c)
that are in excess  of  amounts  distributed  pursuant  to  Section
6.2(a)  shall be applied in  redemption  of all or a portion of the
Member  Units held by such  Member,  effective as of the end of the
preceding  calendar  quarter.  For purposes of this Section 6.2(d),
each  Member  Unit  shall be valued  based upon the  aggregate  Net
Book  Value  as of  the  end  of the  preceding  calendar  quarter,
divided by the  number of Member  Units  outstanding  as of the end
of the preceding calendar quarter.

(e)   The  Members   acknowledge   that  the  Corporate   Manager's
estimate  of  quarterly  Profits of the Company may not be precise,
and  consequently,  recognize  the  right  and  obligation  of  the
Corporate Manager to make an adjusting  distribution  annually once
the Company's audited financial statements have been prepared.

(f)   If  the  Company  has   insufficient   Cash   Available   for
Distribution  to pay all  amounts  pursuant  to Section  6.2(a) and
Section  6.2(c),  it shall pay amounts  pursuant to Section  6.2(a)
before  paying  any  amounts   pursuant  to  Section  6.2(c).   The
Company  shall use its best  efforts  to pay  amounts  pursuant  to
Section  6.2(c),  but shall  not be  obligated  to borrow  funds to
enable it to do so.  The  Company  shall pay such  amounts  as soon
as it is able to do so,  subject  to the prior  obligation  to make
distributions pursuant to Section 6.2(a).
<PAGE>

(g)   If  a  new  or  existing   Member   acquires  an   additional
Membership  Interest in exchange for a Capital  Contribution on any
date  other than the record  date for a Company  distribution  (the
"Company Record Date"), the cash distribution  attributable to such
additional  Membership  Interest  relating  to the  Company  Record
Date next  following  the  issuance of such  additional  Membership
Interest  shall be reduced in the  proportion  to (i) the number of
days that such additional  Membership  Interest is not held by such
Member  bears to (ii)  the  number  of days  between  such  Company
Record Date and the immediately preceding Company Record Date.

(h)   In no event may a Member receive a distribution  of cash with
respect to a Member  Unit if such  Member is  entitled to receive a
cash  dividend  as the  holder of  record  of a  Company  Share for
which  all or  part  of  such  Member  Unit  has  been  or  will be
redeemed.

SECTION 6.3     No Right to Distributions in Kind.
                -----------------------------------

      No Member  shall be  entitled to demand  property  other than
cash in  connection  with  any  distributions  by the  Company.  No
Member   shall  be  entitled  to  withdraw   from  the  Company  in
accordance  with Section  183.0802(3)(a)  of the Act, and except as
provided in  Section 6.2(c),  no Member shall be entitled to obtain
the return of any part of its Capital Contribution in the Company.

SECTION 6.4     Limitations on Distributions.
                -----------------------------

      Notwithstanding  any of the provisions of this Article VI, no
Member shall have the right to receive  from the  Company,  and the
Company  shall not have the right to make,  a  distribution  to any
Member,  if after  giving  effect to the  distribution,  any of the
following would occur:

(a)   The  Company  would be unable to pay its debts as they become
due in the usual course of business; or

(b)   The fair value of the  Company's  total  assets would be less
than the sum of its total  liabilities  plus the amount  that would
be needed,  if the Company  were to be dissolved at the time of the
distribution,  to satisfy the preferential  rights upon dissolution
of  Members,  if any,  whose  preferential  rights are  superior to
those of the Members receiving the distribution.

SECTION 6.5     Distributions Upon Liquidation.
                -------------------------------

      Upon   liquidation  of  the  Company  in  connection  with  a
Terminating  Capital  Transaction  or otherwise,  after payment of,
or adequate  provision for,  debts and  obligations of the Company,
any  remaining  assets of the Company shall be  distributed  to the
Members in the following order of priority:

(a)   First,  toward  satisfaction  of all  outstanding  debts  and
other obligations of the Company;

(b)   Second,  to return to each Tax-Exempt  Member the difference,
if  any,   between  its  Tax-Exempt   Investment   Amount  and  its
Tax-Exempt Ownership Interest; and
<PAGE>

(c)   Third,  the  balance,  if any, to the Members  with  positive
Capital  Accounts in accordance  with, and  proportional  to, their
respective positive Capital Account balances.

For  purposes of this  Section  6.5,  the  Capital  Account of each
Member shall be  determined  after the following  adjustments:  (i)
all  adjustments  made  in  accordance  with  Sections  6.1 and 6.2
resulting   from  Company   operations   and  from  all  sales  and
dispositions of all or any part of the Company's  assets,  (ii) the
distribution  to Tax-Exempt  Members as provided in Section 6.5(b),
and (iii)  allocating to the  Corporate  Manager an amount equal to
the  excess of (A) the value of the  Member  Units it  received  in
exchange for Capital  Contributions  of the proceeds of an issuance
of  Company  Shares  over  (B) the  actual  amount  of its  Capital
Contributions  (i.e., as a result of any underwriters'  discount or
other   expenses   paid  or  incurred  in   connection   with  such
issuance).  Any  distributions  pursuant to this  Section 6.5 shall
be made by the  end of the  Company's  taxable  year in  which  the
liquidation  occurs  (or,  if later,  within 90 days after the date
of  the  liquidation).  To  the  extent  deemed  advisable  by  the
Corporate Manager,  appropriate  arrangements (including the use of
a  liquidating  trust) may be made to assure  that  adequate  funds
are available to pay any contingent debts or obligations.

The  distributions  set forth in this  Section 6.5 are  intended to
comply    with   the    requirement    of    Regulations    Section
1.704-1(b)(2)(ii)(b)(2)  that liquidating  distributions be made in
accordance  with  positive  Capital  Accounts.  It is intended that
such distributions  will result in the Members receiving  aggregate
distributions  equal to the  amount  of  distributions  that  would
have  been  received  if the  liquidating  distributions  were made
pursuant to Section  6.2.  However,  if the balances in the Capital
Accounts do not result in such  intention  being  satisfied,  items
of income,  gain,  loss,  deduction and credit will be  reallocated
among the Members for the fiscal year of the  liquidation  so as to
cause the  balances  in the  Capital  Accounts to be, to the extent
possible,   in  the  amounts  necessary  so  that  such  result  is
achieved.

SECTION 6.6     Substantial Economic Effect.
                ----------------------------

      It is the  intent  of the  Members  that the  allocations  of
Profit  and Loss  under the  Agreement  have  substantial  economic
effect  within the meaning of Code  Section  704(b) as  interpreted
by the Regulations  promulgated  pursuant  thereto.  Article VI and
other relevant  provisions of this  Agreement  shall be interpreted
in a manner consistent with such intent.

SECTION 6.7     Quarter-End Convention.
                -----------------------

      For  purposes of this  Agreement,  all  distributions  (other
than a  distribution  in complete  redemption of a Member's  Member
Interest)  shall be deemed to be made at the end of the  quarter to
which they relate;  provided,  however,  that the proceeds from any
debt  financing  shall be deemed to be made at the end of the month
to which they relate.
<PAGE>

                                  ARTICLE VII

                          CHANGES IN CORPORATE MANAGER

SECTION 7.1     Transfer  of  the  Corporate   Manager's   Member
                -------------------------------------------------
Interest.
---------

(a)   The  Corporate  Manager shall not transfer all or any portion
of its Member  Interest or withdraw as Corporate  Manager except as
provided in or in  connection  with a transaction  contemplated  by
Section 7.1(b).

(b)   Except as otherwise  provided in Section 7.1(c)  hereof,  the
Corporate  Manager  shall not engage in any  merger,  consolidation
or other  combination  with or into  another  Person or sale of all
or substantially  all of its assets,  in each case which results in
a change of control  of the  Corporate  Manager (a  "Transaction"),
unless:

(i)   With  respect to a  Transaction  during the first three years
      following  the  Operations  Date,  the  consent  of  all  the
      Non-Managing  Members  that are Voting  Members is  obtained,
      and with respect to a  Transaction  occurring  subsequent  to
      the third  anniversary of the Operations Date, the consent of
      Non-Managing  Members  that are Voting  Members  holding more
      than  50% of the  Percentage  Interests  of the  Non-Managing
      Members that are Voting Members is obtained;

(ii)  as a result  of such  Transaction  all  Non-Managing  Members
      will  receive  for  each  Member  Unit  an  amount  of  cash,
      securities  or other  property  equal to the  product  of the
      Conversion   Factor   and  the   greatest   amount  of  cash,
      securities  or other  property paid in the  Transaction  to a
      holder  of  one  Corporate  Share  in  consideration  of  one
      Corporate  Share,  provided that if, in  connection  with the
      Transaction,  a purchase,  tender or exchange offer ("Offer")
      shall have been made to and  accepted  by the holders of more
      than 50% of the outstanding  Corporate Shares, each holder of
      Member  Units  shall be given  the  option  to  exchange  its
      Member Units for the greatest  amount of cash,  securities or
      other  property  that  a   Non-Managing   Member  would  have
      received had it (A)  exercised its  Redemption  Right and (B)
      sold,  tendered  or  exchanged  pursuant  to  the  Offer  the
      Corporate  Shares  received upon  exercise of the  Redemption
      Right immediately prior to the expiration of the Offer; or

(iii) the  Corporate   Manager  is  the  surviving  entity  in  the
      Transaction  and either (A) the  holders of Corporate  Shares
      do not  receive  cash,  securities  or other  property in the
      Transaction or (B) all  Non-Managing  Members (other than the
      Corporate  Manager  or any  subsidiary)  receive an amount of
      cash,  securities or other  property  (expressed as an amount
      per Corporate  Share) that is no less than the product of the
      Conversion   Factor   and  the   greatest   amount  of  cash,
      securities  or other  property  (expressed  as an amount  per
      Corporate  Share)  received in the  Transaction by any holder
      of Corporate Shares.
<PAGE>

(c)   Notwithstanding  Section  7.1(b),  the Corporate  Manager may
merge  with  or  into  or   consolidate   with  another  entity  if
immediately  after such merger or consolidation  (i)  substantially
all of the  assets  of  the  successor  or  surviving  entity  (the
"Survivor"),   other  than  Member  Units  held  by  the  Corporate
Manager,  are contributed,  directly or indirectly,  to the Company
as a Capital  Contribution  in  exchange  for  Member  Units with a
fair market  value equal to the value of the assets so  contributed
as  determined  by the Survivor in good faith and (ii) the Survivor
expressly  agrees  to  assume  all  obligations  of  the  Corporate
Manager  hereunder.  Upon such  contribution  and  assumption,  the
Survivor  shall have the right and duty to amend this  Agreement as
set  forth  in this  Section  7.1(c).  The  Survivor  shall in good
faith  arrive  at a new  method  for the  calculation  of the  Cash
Amount,  the Corporate  Shares Amount and  Conversion  Factor for a
Member  Unit  after  any  such  merger  or  consolidation  so as to
approximate  the existing  method for such  calculation  as closely
as  reasonably   possible.   Such   calculation   shall  take  into
account,  among other  things,  the kind and amount of  securities,
cash and other  property  that was  receivable  upon such merger or
consolidation   by  a  holder  of  Corporate   Shares  or  options,
warrants or other rights  relating  thereto,  and to which a holder
of Member  Units could have  acquired  had such  Member  Units been
exchanged  immediately  prior  to  such  merger  or  consolidation.
Such  amendment to this  Agreement  shall provide for adjustment to
such method of  calculation,  which  shall be as nearly  equivalent
as  may  be  practicable  to  the  adjustments  provided  for  with
respect  to the  Conversion  Factor.  The  Survivor  also  shall in
good  faith  modify the  definition  of  Corporate  Shares and make
such  amendments  to Section  8.4 hereof so as to  approximate  the
existing  rights  and  obligations  set  forth  in  Section  8.4 as
closely  as  reasonably  possible.  The  above  provisions  of this
Section  7.1  shall  similarly  apply  to  successive   mergers  or
consolidations permitted hereunder.

      In  respect of any  transaction  described  in the  preceding
paragraph,   the   Corporate   Manager  is   required  to  use  its
commercially  reasonable  efforts to structure such  transaction to
avoid  causing  the  Non-Managing  Members to  recognize  income or
gain for federal  income tax  purposes by virtue of the  occurrence
of or  their  participation  in  such  transaction,  provided  such
efforts  are  consistent  with  the  exercise  of the  board of the
Corporate  Manager's  fiduciary  duties to the  shareholders of the
Corporate Manager under applicable law.

(d)   Notwithstanding Section 7.1(b),

(i)   a Corporate  Manager may  transfer  all or any portion of its
      Member  Interest  to (A) a  wholly-owned  subsidiary  of such
      Corporate  Manager or (B) the owners of all of the  ownership
      interests of such Corporate  Manager and following a transfer
      of all of its Member  Interest,  may  withdraw  as  Corporate
      Manager; and

(ii)  the Corporate  Manager may engage in a  transaction  required
      by law or by the rules of any  national  securities  exchange
      on which the  Corporate  Shares are listed to be submitted to
      the vote of the holders of the Corporate Shares.

SECTION 7.2     Admission of a Substitute or Additional  Corporate
                ---------------------------------------------------
                Manager.
                --------

      A Person  shall be admitted  as a  substitute  or  additional
Corporate  Manager of the Company only if the  following  terms and
conditions are satisfied:
<PAGE>

(a)   the  Person to be  admitted  as a  substitute  or  additional
Corporate  Manager  shall have  accepted  and agreed to be bound by
all the terms and  provisions  of this  Agreement  by  executing  a
counterpart  thereof and such other  documents  or  instruments  as
may be required  or  appropriate  in order to effect the  admission
of  such  Person  as a  Corporate  Manager  and all  other  actions
required by herein in  connection  with such  admission  shall have
been performed; and

(b)   if the Person to be admitted as a  substitute  or  additional
Corporate  Manager  is  an  entity,  it  shall  have  provided  the
Company with  evidence  satisfactory  to counsel for the Company of
such  Person's  authority  to become a Corporate  Manager and to be
bound by the terms and provisions of this Agreement.

SECTION 7.3  Effect of Bankruptcy, Withdrawal or Liquidation of
             --------------------------------------------------
             the Corporate Manager.
             ----------------------

(a)   Upon  the  occurrence  of an Event  of  Bankruptcy  as to the
Corporate  Manager  (and its  removal  pursuant  to Section  7.4(a)
hereof)  or  the   withdrawal,   removal  or   liquidation  of  the
Corporate  Manager,  the Company shall be dissolved and  terminated
unless  the  Company  is  continued   pursuant  to  Section  7.3(b)
hereof.  The  merger  of the  Corporate  Manager  with or into  any
entity that is  admitted as a  substitute  or  successor  Corporate
Manager  pursuant to Section  7.2 hereof  shall not be deemed to be
the withdrawal, liquidation or removal of the Corporate Manager.

(b)   Following the  occurrence of an Event of Bankruptcy as to the
Corporate  Manager  (and its  removal  pursuant  to Section  7.4(a)
hereof)  or  the   withdrawal,   removal  or   liquidation  of  the
Corporate  Manager,   the  Non-Managing  Members  that  are  Voting
Members,  within  90 days  after  such  occurrence,  may  elect  to
continue  the  business  of the  Company by  selecting,  subject to
Section 7.2 hereof and any other  provisions of this  Agreement,  a
substitute  Corporate  Manager by consent of a majority in interest
of  the  Non-Managing  Members  that  are  Voting  Members.  If the
Non-Managing   Members  elect  to  continue  the  business  of  the
Company   and   admit   a   substitute   Corporate   Manager,   the
relationship  with the Members  and of any Person who has  acquired
an interest  of a Member in the  Company  shall be governed by this
Agreement.

SECTION 7.4     Removal of a Corporate Manager.
                -------------------------------

(a)   Except  upon   unanimous   agreement  of  the  Members,   the
Non-Managing  Members may not remove the  Corporate  Manager,  with
or without  cause.  Upon the  occurrence  of an Event of Bankruptcy
as to  the  Corporate  Manager,  the  Corporate  Manager  shall  be
deemed to be removed automatically.

(b)   If a  Corporate  Manager  has been  removed  pursuant to this
Section  7.4 and the Company is  continued  pursuant to Section 7.3
hereof,  such Corporate  Manager shall promptly transfer and assign
its Member  Interest  in the  Company to the  substitute  Corporate
Manager  approved by a majority  in  interest  of the  Non-Managing
Members that are Voting  Members in accordance  with Section 7.3(b)
hereof and  otherwise  admitted to the Company in  accordance  with
Section  7.2  hereof.  At  the  time  of  assignment,  the  removed
Corporate   Manager   shall  be  entitled   to  receive   from  the
<PAGE>

substitute  Corporate  Manager the fair market  value of the Member
Interest  of such  removed  Corporate  Manager  as  reduced  by any
damages  caused to the  Company  by such  Corporate  Manager.  Such
fair market  value shall be  determined  by an  appraiser  mutually
agreed  upon by the  Corporate  Manager  and a majority in interest
of the  Non-Managing  Members  that are  Voting  Members  within 10
days  following  the  removal  of  the  Corporate  Manager.  In the
event that the parties are unable to agree upon an  appraiser,  the
removed  Corporate  Manager  and a  majority  in  interest  of  the
Non-Managing  Members that are Voting  Members each shall select an
appraiser.  Each such  appraiser  shall  complete an  appraisal  of
the fair market  value of the removed  Corporate  Manager's  Member
Interest  within 30 days of the Corporate  Manager's  removal,  and
the fair market  value of the removed  Corporate  Manager's  Member
Interest  shall be the  average  of the two  appraisals;  provided,
however,  that if the higher appraisal  exceeds the lower appraisal
by more  than 20% of the  amount of the  lower  appraisal,  the two
appraisers,  no  later  than  40  days  after  the  removal  of the
Corporate  Manager,  shall  select  a  third  appraiser  who  shall
complete  an  appraisal  of the fair  market  value of the  removed
Corporate  Manager's  Member  Interest  no later than 60 days after
the  removal  of the  Corporate  Manager.  In such  case,  the fair
market value of the removed  Corporate  Manager's  Member  Interest
shall be the average of the two appraisals closest in value.

(c)   The Member Interest of a removed  Corporate  Manager,  during
the time after  bankruptcy  until  transfer  under Section  7.4(b),
shall  be  converted  to that  of a  special  Non-Managing  Member;
provided,  however,  such removed  Corporate Manager shall not have
any rights to  participate  in the  management  and  affairs of the
Company,  and shall not be  entitled  to any portion of the income,
expense,  profit,  gain or loss  allocations or cash  distributions
allocable  or  payable,  as the  case may be,  to the  Non-Managing
Member.  Instead,  such removed  Corporate  Manager  shall  receive
and be entitled  only to retain  distributions  or  allocations  of
such  items  that it would  have been  entitled  to  receive in its
capacity as  Corporate  Manager,  until the  transfer is  effective
pursuant to Section 7.4(b).

(d)   All  Members  shall  have  given  and  hereby  do  give  such
consents,   shall  take  such   actions  and  shall   execute  such
documents as shall be legally  necessary  and  sufficient to effect
all the foregoing provisions of this Section.

                                  ARTICLE VIII

               RIGHTS AND OBLIGATIONS OF THE NON-MANAGING MEMBERS

SECTION 8.1     Management of the Company.
                --------------------------

      Except  to  the  extent   provided  in  Section   10.1,   the
Non-Managing  Members shall not  participate  in the  management or
control of Company  business  nor shall they  transact any business
for the  Company,  nor  shall  they  have the  power to sign for or
bind the Company,  such powers being vested solely and  exclusively
in the Corporate Manager.

SECTION 8.2     Power of Attorney.
                ------------------

      Each  Non-Managing  Member  hereby  irrevocably  appoints the
Corporate  Manager  its true and lawful  attorney-in-fact,  who may
act for each Member and in its name,  place and stead,  and for its
use and benefit, to sign,  acknowledge,  swear to, deliver, file or
record, at the appropriate  public offices,  any and all documents,
certificates   and  instruments  as  may  be  deemed  necessary  or
desirable  by  the  Corporate   Manager  to  carry  out  fully  the
provisions of this  Agreement and the Act in accordance  with their
terms,  which  power of attorney  is coupled  with an interest  and
shall  survive the death,  dissolution  or legal  incapacity of the
Non-Managing  Member,  or the transfer by the Member of any part or
all of its Member Interest.
<PAGE>

SECTION 8.3     Limitation on Liability of Non-Managing Members.
                ------------------------------------------------

      No  Non-Managing  Member  shall  be  liable  for  any  debts,
liabilities,   contracts  or   obligations   of  the   Company.   A
Non-Managing  Member  shall be liable to the  Company  only to make
payments  of its  Capital  Contribution,  if any,  as and  when due
hereunder.  After  its  Capital  Contribution  is  fully  paid,  no
Non-Managing  Member  shall,  except as  otherwise  required by the
Act,  be  required to make any  further  Capital  Contributions  or
other payments or lend any funds to the Company.

SECTION 8.4     Redemption Right.
                -----------------

(a)   Subject  to  Sections  8.4(b),   8.4(c),  and  8.4(d),   each
Non-Managing  Member shall have the right,  commencing on the third
anniversary of the Operations  Date (the  "Redemption  Right"),  to
require the Company to redeem on a  Specified  Redemption  Date all
or a portion of the Member Units held by such  Non-Managing  Member
at a  redemption  price equal to and in the form of the Cash Amount
to be paid by the  Company,  provided  that such Member Units shall
have  been  outstanding  for at  least  twelve  months  immediately
prior to such third  anniversary.  The  Redemption  Right  shall be
exercised  pursuant  to a Notice  of  Redemption  delivered  to the
Company   (with  a  copy   to  the   Corporate   Manager)   by  the
Non-Managing  Member who is exercising  the  Redemption  Right (the
"Redeeming Member");  provided, however, that the Company shall not
be  obligated  to satisfy such  Redemption  Right if the  Corporate
Manager  elects to purchase the Member Units  subject to the Notice
of Redemption;  and provided,  further, that no Non-Managing Member
may  deliver  more  than two  Notices  of  Redemption  during  each
calendar  year.  A   Non-Managing   Member  may  not  exercise  the
Redemption  Right  for less  than  5,000  Member  Units or, if such
Non-Managing  Members  holds less than 5,000 Member  Units,  all of
the Member Units held by such Member.  The  Redeeming  Member shall
have no right,  with respect to any Member  Units so  redeemed,  to
receive any  distribution  paid with respect to Member Units if the
record  date for such  distribution  is on or after  the  Specified
Redemption Date.

(b)   Notwithstanding   the   provisions   of   Section 8.4(a),   a
Non-Managing  Member that exercises the  Redemption  Right shall be
deemed to have  offered to sell the Member  Units  described in the
Notice of Redemption to the  Corporate  Manager,  and the Corporate
Manager  may,  in  its  sole  and  absolute  discretion,  elect  to
purchase  directly  and acquire  such Member Units by paying to the
Redeeming  Member  either the Cash Amount or the  Corporate  Shares
Amount,  as  elected  by the  Corporate  Manager  (in its  sole and
absolute  discretion),  on the Specified Redemption Date, whereupon
the  Corporate  Manager  shall acquire the Member Units offered for
redemption  by the  Redeeming  Member and shall be treated  for all
purposes of this  Agreement as the owner of such Member  Units.  If
the  Corporate  Manager  shall  elect  to  exercise  its  right  to
purchase Member Units under this  Section 8.4(b)  with respect to a
Notice of  Redemption,  it shall so  notify  the  Redeeming  Member
within  five  Business  Days  after the  receipt  by the  Corporate
Manager of such Notice of Redemption.
<PAGE>

      In the event the Corporate  Manager shall  exercise its right
to  purchase  Member  Units  with  respect  to  the  exercise  of a
Redemption  Right in the manner  described in the first sentence of
this  Section 8.4(b),  the Company  shall have no obligation to pay
any amount to the Redeeming  Member with respect to such  Redeeming
Member's  exercise  of  such  Redemption  Right,  and  each  of the
Redeeming  Member,  the Company  and the  Corporate  Manager  shall
treat  the  transaction  between  the  Corporate  Manager  and  the
Redeeming  Member for federal  income tax purposes as a sale of the
Redeeming   Member's   Units  to  the   Corporate   Manager.   Each
Redeeming   Member   agrees  to  execute  such   documents  as  the
Corporate  Manager may  reasonably  require in connection  with the
issuance  of  Corporate  Shares  upon  exercise  of the  Redemption
Right.

(c)   Any Cash Amount to be paid to a Redeeming  Member pursuant to
this Section 8.4 shall be paid on the  Specified  Redemption  Date;
provided,  however,  that the Corporate  Manager may elect to cause
the  Specified   Redemption  Date  to  be  delayed  for  up  to  an
additional  180  days to the  extent  required  for  the  Corporate
Manager  to cause  additional  Corporate  Shares  to be  issued  to
provide  financing  to be used to make  such  payment  of the  Cash
Amount.   Notwithstanding  the  foregoing,  the  Corporate  Manager
agrees  to use  its  best  efforts  to  cause  the  closing  of the
acquisition  of  redeemed   Member  Units  hereunder  to  occur  as
quickly as reasonably possible.

(d)   The exercise by Members of their  Redemption  Rights shall be
subject to the provisions of Section  9.2(c).  The rights  provided
by this  Section  8.4 shall be in lieu of any  rights  provided  to
the Members under Wisconsin Statutes Section  196.485(3m)(c)4.

SECTION 8.5     Registration.
                -------------

(a)   Registration  of the  Corporate  Shares.  Upon the earlier of
the  fourth  anniversary  of the  Operations  Date or the  one-year
anniversary  of the IPO, the Corporate  Manager agrees to file with
the  Commission a registration  statement  under the Securities Act
(a  "Registration  Statement")  covering  the  resale of all of the
Corporate  Shares  that  may be  issued  upon  redemption  of  such
Member Units pursuant to Section 8.4  ("Redemption  Shares") in the
event  that  the  Non-Managing   Members,   as  a  group,   request
registration  covering the resale of at least  1,000,000  Corporate
Shares;  provided  however,  that only two such  registrations  may
occur each  year.  Notwithstanding  the  foregoing,  the  Corporate
Manager  shall not be obligated to effect a  registration  pursuant
to this Section  8.5(a)  during the period  starting  with the date
45 days prior to the Corporate  Manager's  estimated date of filing
of,  and ending on a date 180 days  following  the  effective  date
of, a registration  statement  pertaining to an underwritten public
offering  of  Corporate  Shares for the  account  of the  Corporate
Manager.  If, while a registration  request is pending  pursuant to
this Section 8.5(a),  the Corporate  Manager has determined in good
faith  that  (i)  the  filing  of a  registration  statement  could
jeopardize or delay any  contemplated  material  transaction  other
than a financing  plan  involving  the  Corporate  Manager or would
require the disclosure of material  information  that the Corporate
Manager  had  a  bona  fide  business  purpose  for  preserving  as
<PAGE>

confidential;  (ii) the Corporate  Manager then is unable to comply
with  requirements  of the  Commission  applicable to the requested
registration  (notwithstanding  its best  efforts  to so comply) or
(iii)  or  the  Corporate   Manager  has  not  received  any  state
approval,  the Corporate  Manager shall not be required to effect a
registration  pursuant to this Section  8.5(a) until the earlier of
(x)  the  date  upon  which  such   contemplated   transaction   is
completed or abandoned or such  material  information  is otherwise
disclosed  to the public or ceases to be material or the  Corporate
Manager   is  able  to  so  comply   with   applicable   Commission
requirements  or received state  approvals,  as the case may be, or
(y) 45 days  after the  Corporate  Manager  makes  such  good-faith
determination.   The   Non-Managing   Members   also  may   request
"piggyback"  registration of their Redemption  Shares.  Upon any of
such requests, the Corporate Manager will:

(A)   provide  written notice of such request within 10 days of the
           receipt of such request to the Non-Managing  Members not
           a party to the request;

(B)   use its best  efforts  to have  such  Registration  Statement
           declared  effective  by the  Commission  and to  keep it
           effective  for a  period  of 180  days  (the  "Effective
           Period");

(C)   give each holder of Redemption  Shares,  their  underwriters,
           if any, and their  counsel and  accountants a reasonable
           opportunity  to  participate  in the  preparation of the
           Registration  Statement and give such persons reasonable
           access to its books,  records,  officers and independent
           public accountants;

(D)   furnish to each holder of  Redemption  Shares such numbers of
           copies of  prospectuses,  and  supplements or amendments
           thereto,   and  such  other  documents  as  such  holder
           reasonably requests;

(E)   register   or   qualify   the   securities   covered  by  the
           Registration  Statement under the securities or blue sky
           laws of such  jurisdictions  within the United States as
           any  holder  of  Redemption   Shares  shall   reasonably
           request,  and do such other  reasonable  acts and things
           as may be  required  of it to  enable  such  holders  to
           consummate  the  sale  or  other   disposition  in  such
           jurisdictions  of  the  Redemption   Shares;   provided,
           however,   that  the  Corporate  Manager  shall  not  be
           required  to (i)  qualify  as a foreign  corporation  or
           consent to a general or unlimited  service or process in
           any  jurisdictions  in which it would not  otherwise  be
           required to be  qualified  or so consent or (ii) qualify
           as a dealer in securities;

(F)   furnish,  at the request of the holders of Redemption Shares,
           on the  date  Redemption  Shares  are  delivered  to the
           underwriters  for sale  pursuant  to such  registration,
           or,  if  such  Redemption  Shares  are  not  being  sold
           through  underwriters,  on  the  date  the  Registration
           Statement  with  respect  to  such   Redemption   Shares
           becomes  effective,  (A) a securities opinion of counsel
           representing  the Corporate  Manager for the purposes of
           such  registration  covering  such legal  matters as are
           customarily  included in such  opinions  and (B) letters
<PAGE>

           of the  firm  of  independent  public  accountants  that
           certified  the  financial  statements  included  in  the
           Registration  Statement,  addressed to the underwriters,
           covering   substantially   the  same   matters   as  are
           customarily  covered in accountants'  letters  delivered
           to  underwriters  in  underwritten  public  offerings of
           securities  and such  other  financial  matters  as such
           holders  (or the  underwriters,  if any) may  reasonably
           request;

(G)   otherwise use its best efforts to comply with all  applicable
           rules and regulations of the Commission;

(H)   enter into and  perform an  underwriting  agreement  with the
           managing  underwriter,  if  any,  selected  as  provided
           herein,  containing  customary  (A)  terms of offer  and
           sale   of   the    securities,    payment    provisions,
           underwriting   discounts   and   commissions   and   (B)
           representations,   warranties,  covenants,  indemnities,
           terms and conditions; and

(I)   keep the holders of the  Redemption  Shares advised as to the
           initiation and progress of the Registration Statement.

      The Corporate  Manager  further  agrees to supplement or make
amendments  to each  Registration  Statement,  if  required  by the
Commission's rules,  regulations or instructions  applicable to the
registration  form  utilized  by the  Corporate  Manager  or by the
Securities  Act  or  rules  and  regulations  thereunder  for  such
Registration  Statement.  Notwithstanding the foregoing, if for any
reason the  effectiveness  of a  Registration  Statement is delayed
or suspended or it ceases to be available  for sales of  Redemption
Shares  thereunder,  the Effective  Period shall be extended by the
aggregate   number   of   days  of  such   delay,   suspension   or
unavailability.

(b)   Listing on  Securities  Exchange.  If the  Corporate  Manager
shall list or maintain the listing of any  Corporate  Shares on any
securities  exchange  or  national  market  system,  it will at its
expense and as  necessary  to permit the  registration  and sale of
the Redemption Shares hereunder,  list thereon,  maintain and, when
necessary,   increase  such  listing  to  include  such  Redemption
Shares.

(c)   Registration  Not Required.  Notwithstanding  the  foregoing,
the  Corporate  Manager  shall not be  required to file or maintain
the   effectiveness  of  a  registration   statement   relating  to
Redemption  Shares after the first date upon which,  in the opinion
of counsel to the Corporate  Manager,  all of the Redemption Shares
covered  thereby  could  be  sold  by the  holders  thereof  in any
period of three  months  pursuant to Rule 144 under the  Securities
Act, or any successor rule thereto.

(d)   Allocation  of Expenses.  The Company  shall pay all expenses
in connection with the Registration  Statement,  including  without
limitation  (i) all  expenses  incident to filing with the National
Association of Securities  Dealers,  Inc., (ii) registration  fees,
(iii)  printing  expenses,  (iv)  accounting  and  legal  fees  and
expenses,  except to the extent holders of Redemption  Shares elect
to engage  accountants or attorneys in addition to the  accountants
and  attorneys  engaged by the  Corporate  Manager or the  Company,
(v)  accounting  expenses  incident  to or  required  by  any  such
registration or  qualification  and (vi) expenses of complying with
the   securities  or  blue  sky  laws  of  any   jurisdictions   in
connection  with  such  registration  or  qualification;  provided,
however,  the Company  shall not be liable for (A) any discounts or
<PAGE>

commissions to any  underwriter or broker  attributable to the sale
of Redemption  Shares,  (B) the fees and expenses of counsel to the
Non-Managing  Members  or (C) any  fees  or  expenses  incurred  by
holders of Redemption  Shares in connection with such  registration
that,  according  to the  written  instructions  of any  regulatory
authority, the Company is not permitted to pay.

(e)   It shall be a condition  precedent to the  obligations of the
Corporate  Manager to take any action  pursuant to this Section 8.5
that the  Non-Managing  Members  proposing to sell Corporate Shares
shall furnish to the Corporate  Manager such information  regarding
them, the Corporate  Shares held by them,  and the intended  method
of  disposition  of such  securities  and such other matters as may
be  required  by  the  1933  Act  and  other  applicable  laws  and
regulations  as the  Corporate  Manager  shall request and as shall
be  required  in  connection  with  the  action  to be taken by the
Corporate Manager.

(f)   Indemnification.

(i)   In connection with the Registration Statement,  the Corporate
      Manager  and  the  Company  agree  to  indemnify  holders  of
      Redemption  Shares  within  the  meaning of Section 15 of the
      Securities  Act,   against  all  losses,   claims,   damages,
      liabilities  and  expenses  (including  reasonable  costs  of
      investigation)  caused  by any  untrue,  or  alleged  untrue,
      statement of a material  fact  contained in the  Registration
      Statement,  preliminary  prospectus or prospectus (as amended
      or   supplemented   if  the  Corporate   Manager  shall  have
      furnished any  amendments or  supplements  thereto) or caused
      by any  omission  or  alleged  omission,  to state  therein a
      material fact  required to be stated  therein or necessary to
      make the statements  therein not  misleading,  except insofar
      as such losses, claims, damages,  liabilities or expenses are
      caused by any untrue  statement,  alleged  untrue  statement,
      omission,   or  alleged   omission  based  upon   information
      furnished  to  the  Corporate   Manager   expressly  for  use
      therein.  The Corporate  Manager and each  officer,  director
      and  controlling  person of the  Corporate  Manager  shall be
      indemnified  by each holder of Redemption  Shares  covered by
      the  Registration  Statement  for all  such  losses,  claims,
      damages,   liabilities  and  expenses  (including  reasonable
      costs  of  investigation)  caused  by  any  such  untrue,  or
      alleged  untrue,  statement or any such omission,  or alleged
      omission,  based upon information  furnished to the Corporate
      Manager  expressly for use therein in a writing signed by the
      holder.

(ii)  Promptly  upon  receipt  by a party  indemnified  under  this
      Section  8.6(f) of notice of the  commencement  of any action
      against such indemnified  party in respect of which indemnity
      or  reimbursement  may be  sought  against  any  indemnifying
      party  under this  Section  8.5(f),  such  indemnified  party
      shall  notify  the  Corporate   Manager  in  writing  of  the
      commencement  of such  action,  but the  failure to so notify
      the  Corporate  Manager shall not relieve it of any liability
      that it may  have to any  indemnified  party  otherwise  than
      under  this  Section   8.5(f)   unless  such  failure   shall
      materially  adversely  affect the defense of such action.  In
      case  notice  of  commencement  of any such  action  shall be
      given  to  the  Corporate  Manager  as  above  provided,  the
      Corporate  Manager shall be entitled to  participate  in and,
      to  the   extent  it  may  wish,   jointly   with  any  other
      indemnifying party similarly notified,  to assume the defense
<PAGE>

      of such action at its own expense,  with counsel chosen by it
      and reasonably  satisfactory to such  indemnified  party. The
      indemnified  party  shall  have the right to employ  separate
      counsel in any such  action and  participate  in the  defense
      thereof,  but the fees and  expenses of such  counsel  (other
      than reasonable costs of investigation)  shall be paid by the
      indemnified  party  unless (i) the  Corporate  Manager or the
      Company  agrees to pay the same,  (ii) the Corporate  Manager
      fails to assume  the  defense  of such  action  with  counsel
      reasonably  satisfactory  to the  indemnified  party or (iii)
      the  named  parties  to  any  such  action   (including   any
      impleaded  parties)  have been  advised by such  counsel that
      representation  of such  indemnified  party and the Corporate
      Manager  by the same  counsel  would be  inappropriate  under
      applicable  standards of professional  conduct (in which case
      the Corporate  Manager shall not have the right to assume the
      defense  of  such  action  on  behalf  of  such   indemnified
      party).  No  indemnifying  party  shall  be  liable  for  any
      settlement entered into without its consent.

(g)   Contribution.

(i)   If   for   any   reason   the   indemnification    provisions
      contemplated  by Section  8.5(f) are  either  unavailable  or
      insufficient  to  hold  harmless  an  indemnified   party  in
      respect  of  any  losses,   claims,  damages  or  liabilities
      referred to therein,  then the party that would  otherwise be
      required  to  provide  indemnification  or  the  indemnifying
      party (in either case,  for purposes of this Section  8.5(g),
      the "Indemnifying Party") in respect of such losses,  claims,
      damages or liabilities,  shall  contribute to the amount paid
      or payable by the party that would  otherwise  be entitled to
      indemnification  or the  indemnified  party (in either  case,
      for  purposes  of  this  Section  8.5(g),   the  "Indemnified
      Party")  as  a  result  of  such  losses,  claims,   damages,
      liabilities or expense,  in such proportion as is appropriate
      to reflect the relative fault of the  Indemnifying  Party and
      the  Indemnified   Party,  as  well  as  any  other  relevant
      equitable   considerations.   The   relative   fault  of  the
      Indemnifying  Party and Indemnified Party shall be determined
      by reference  to, among other  things,  whether the untrue or
      alleged  untrue  statement of a material  fact or omission or
      alleged   omission  to  state  a  material  fact  related  to
      information   supplied   by   the   Indemnifying   Party   or
      Indemnified   Party,   and  the  parties'   relative  intent,
      knowledge,  access to information  and opportunity to correct
      or prevent such  statement  or  omission.  The amount paid or
      payable  by a  party  as a  result  of  the  losses,  claims,
      damages,  liabilities and expenses referred to above shall be
      deemed  to  include  any  legal  or  other  fees or  expenses
      reasonably  incurred  by such  party.  In no event  shall any
      holder  of  Redemption  Shares  covered  by the  Registration
      Statement be required to  contribute  an amount  greater than
      the dollar  amount of the  proceeds  received  by such holder
      from  the  sale  of   Redemption   Shares   pursuant  to  the
      registration giving rise to the liability.

(ii)  The  parties  hereto  agree  that it  would  not be just  and
      equitable if  contributions  pursuant to this Section  8.5(g)
      were determined by pro rata  allocation  (even if the holders
      or any  underwriters  or  all of  them  were  treated  as one
      entity  for  such   purpose)  or  by  any  other   method  of
      allocation  that  does  not  take  account  of the  equitable
<PAGE>

      considerations  referred  to  in  the  immediately  preceding
      paragraph.  No person or entity  determined to have committed
      a fraudulent  misrepresentation (within the meaning of Section 11(f)
      of the  Securities  Act) shall be  entitled  to  contribution
      from  any  person  or  entity  who  was  not  guilty  of such
      fraudulent misrepresentation.

(iii) The  contribution  provided for in this Section  8.5(g) shall
      survive the  termination  of this  Agreement and shall remain
      in full  force and  effect  regardless  of any  investigation
      made by or on behalf of any Indemnified Party.

                                   ARTICLE IX

                                    TRANSFER

SECTION 9.1     Purchase Not for Distribution.
                ------------------------------

(a)   Each Member  hereby  represents  and  warrants to the Company
that  the   acquisition  of  its  Member  Interest  is  made  as  a
principal  for its  account  and not with a view to the  resale  or
distribution of such Member Interest.

(b)   Each  Member  agrees  that  it  will  not  sell,   assign  or
otherwise  transfer its Member  Interest or any  fraction  thereof,
whether  voluntarily  or by operation of law or at judicial sale or
otherwise,  to any  Person  who does  not make the  representations
and  warranties  to the Company set forth in Section  9.1(a)  above
and  similarly  agree not to sell,  assign or transfer  such Member
Interest or fraction  thereof to any Person who does not  similarly
represent, warrant and agree.

SECTION 9.2     Restrictions on Transfer of Member Interests.
                ---------------------------------------------

(a)   Except as  permitted  pursuant to Section  9.3, no Member may
offer,  sell,  assign, or otherwise  transfer all or any portion of
its Member  Interest,  whether  voluntarily  or by operation of law
or at judicial  sale or  otherwise  (collectively,  a  "Transfer"),
until the  third  anniversary  of the  Operations  Date;  provided,
however,  that the  foregoing  shall  not  prohibit  the  pledge or
hypothecation  of any  Member's  interest for  financing  purposes.
Any such  purported  Transfer  shall be  considered  to be null and
void ab initio and shall not be given effect.

(b)   Prior to the  consummation of any Transfer under this Article
IX, the  transferor  and/or  the  transferee  shall  deliver to the
Corporate  Manager such opinions,  certificates and other documents
as the  Corporate  Manager shall  reasonably  request in connection
with such Transfer.

(c)   Notwithstanding   any  other  provision  of  this  Agreement,
including  the  provisions  of  Section  8.4 and  Section  9.3,  no
Member may effect a Transfer  of its Member  Interest,  in whole or
in part:

(i)   If, in the  opinion of legal  counsel for the  Company,  such
      proposed  Transfer  would  require  the  registration  of the
      Member  Interest under the Securities Act or would  otherwise
      violate any  applicable  federal or state  securities or blue
      sky law (including investment suitability standards);
<PAGE>

(ii)  If in the  opinion of legal  counsel  for the  Company,  such
      Transfer  would  cause  the  Company  to  be  regarded  as  a
      publicly-traded partnership under Code Section 7704; or

(iii) If such proposed  Transfer  would cause a termination  of the
      partnership for tax purposes under Code Section  708(b)(1)(B)
      (because  of the  Transfer in any  12-month  period of 50% or
      more of the capital and profits of the Company).

(d)   Any Member  that  desires to  Transfer  all or any portion of
its  Member  Interest  other  than a  pledge  or  hypothecation  of
Member  Interests  for  financing  purposes  (including  exchanging
Member  Units for  Corporate  Shares)  shall  notify the  Corporate
Manager of its  intention to  Transfer,  the number of Member Units
proposed  to be  sold,  and  the  date on  which  the  Transfer  is
proposed  to occur,  which shall be at least 45 days after the date
of such notice.  The  Corporate  Manager shall  thereupon  promptly
provide  such  information  to the other  Members.  Any Member that
proposes  to sell its  Members  Interests  within  the  ensuing  12
months after the proposed  date of sale shall notify the  Corporate
Manager of the number of Member  Units  proposed to be sold by such
Member.

(i)   If  the  total  number  of  Member   Units   proposed  to  be
      transferred  by all the Members is less than 50% of the total
      number of  outstanding  Member  Units,  then all such Members
      shall be entitled to Transfer  the Member  Units  proposed to
      be transferred by them.

(ii)  If  the  total  number  of  Member   Units   proposed  to  be
      transferred  by all the Members  equals or exceeds 50% of the
      total  number of  outstanding  Member  Units,  then each such
      Member  shall be entitled  to  Transfer  that number of Units
      proposed to be  transferred  by it  multiplied  by a fraction
      the numerator of which is such Member's  Percentage  Interest
      and the denominator of which is all such Members'  Percentage
      Interests.

(iii) If any Member does not Transfer at least  one-half the number
      of Units  proposed to be  transferred by it within 90 days of
      the date  specified in such Member's  notice to the Corporate
      Manager,  such  Member  will  not be  permitted  to sell  any
      Member Units owned by it for the 12-month  period  commencing
      on  the  date  specified  in  such  Member's  notice  to  the
      Corporate Manager.

SECTION 9.3     Permitted Transfers.
                --------------------

(a)   During the first three years  following the Operations  Date,
any Member may offer all or any  portion of its Member  Interest to
other  Members at a price per Member Unit equal to the  quotient of
the Net  Book  Value  as of the  end of the  most  recent  calendar
quarter  divided by the number of Member  Units  outstanding  as of
such date.

(i)   Upon the  request  of any  Member  specifying  the  number of
      Member   Units   proposed   to  be  sold   (which   shall  be
      irrevocable),  the Company  shall advise the other Members of
<PAGE>

      the proposed  sale and the number of Member  Units  allocated
      for  purchase  by each  Member  based upon  their  Percentage
      Interests,  exclusive  of the  selling  Member.  Each  Member
      shall have 30 days to indicate  its  interest  in  purchasing
      all or a portion of the number of Member  Units  allocated to
      it. If any Member  Units  remain  unsold,  the Company  shall
      advise the remaining  Members,  which shall have the right to
      purchase the remaining  Member Units in accordance with their
      respective  Percentage  Interests  exclusive  of the  selling
      Member and non-purchasing Members.

(ii)  The  closing  for any such sale  shall  occur  within 45 days
      following the initial notice to the Members of the sale.

(b)   Subject to any required regulatory approvals,

(i)   any Member may transfer its Member Interest,  at any time, to
      a  Person,  so  long  as  such  Person  is and  remains  100%
      directly  or  indirectly  owned by the  Member,  the  related
      Electric  Utility  (if  different  than  the  Member)  or the
      related  holding  company.  In the  event  that  prior to the
      third  anniversary of the Operations  Date,  such Person,  or
      any  other  direct or  indirect  parent  of such  Person,  is
      proposed  to be sold,  the  interest  of such  Person  in the
      Company shall first be  transferred to a Person 100% directly
      or  indirectly  owned  by the  related  Electric  Utility  or
      holding company; and

(ii)  with  respect to a Member that has  members,  such Member may
      transfer  its  Membership  Interest  to  its  members  or  to
      another entity owned by such Members.

(c)   A Member may Transfer its Member  Interest in connection with
such   Member's   merger,   consolidation,   or   sale  of  all  or
substantially  all of its  assets,  so  long  as the  surviving  or
purchasing  entity shall  execute a counterpart  of this  Agreement
to evidence its assent hereto.

SECTION 9.4     Admission of Substitute Member.
                --------------------------------

(a)   Subject  to the  other  provisions  of this  Article  IX,  an
assignee of the Member  Interest of a  Non-Managing  Member  (which
shall be understood  to include any  purchaser,  transferee,  donee
or other  recipient  of any  disposition  of such Member  Interest)
shall be deemed  admitted as a Member of the Company  only with the
consent of the Corporate  Manager (which shall not be  unreasonably
withheld) and upon the satisfactory completion of the following:

(i)   The  assignee  shall have  accepted and agreed to be bound by
      the terms and  provisions  of this  Agreement  by executing a
      counterpart  or an  amendment  thereof,  including  a revised
      Schedule A, and such other  documents or  instruments  as the
      ------------
      Corporate   Manager  may  require  in  order  to  effect  the
      admission of such Person as a Member.

(ii)  To the extent  required,  an amended  certificate  evidencing
      the  admission  of such  Person as a Member  shall  have been
      signed,  acknowledged  and  filed for  record  to the  extent
      required by the Act.
<PAGE>

(iii) The assignee  shall have  delivered a letter  containing  the
      representation  set forth in  Section  9.1(a)  hereof and the
      agreement set forth in Section 9.1(b) hereof.

(iv)  If  the  assignee  is an  entity,  the  assignee  shall  have
      provided the Corporate Manager with evidence  satisfactory to
      counsel  for  the  Company  of the  assignee's  authority  to
      become  a Member  under  the  terms  and  provisions  of this
      Agreement.

(v)   The  assignee   shall  have  executed  a  power  of  attorney
      containing  the terms and provisions set forth in Section 8.2
      hereof.

(vi)  The  assignee  shall  have  paid all  legal  fees  and  other
      expenses of the Company and the Corporate  Manager and filing
      and publication  costs in connection with its substitution as
      a Member.

(b)   For  the  purpose  of  allocating   Profits  and  Losses  and
distributing  cash  received by the Company,  a  Substitute  Member
shall be treated as having  become,  and  appearing  in the records
of the  Company  as, a Member  at the end of the month in which the
filing of the certificate  described in Section  9.4(a)(ii)  hereof
occur  or if no such  filing  is  required,  the  later of the date
specified  in the  transfer  documents  or the  date on  which  the
Corporate  Manager  has  received  all  necessary   instruments  of
transfer and substitution.

(c)   The  Corporate   Manager  shall  cooperate  with  the  Person
seeking   to  become  a   Substitute   Member  by   preparing   the
documentation  required  by this  Section  and making all  official
filings and  publications.  The Company  shall take all such action
as  promptly  as  practicable   after  the   satisfaction   of  the
conditions  in this  Article IX to the  admission of such Person as
a Member of the Company.

SECTION 9.5     Rights of Assignees of Members Interests.
                -----------------------------------------

(a)   Subject to the  provisions  of  Sections  9.2 and 9.3 hereof,
except as required by operation  of law,  the Company  shall not be
obligated for any purposes  whatsoever to recognize the  assignment
by  any  Member  of its  Member  Interest  until  the  Company  has
received notice thereof.

(b)   Any Person  who is the  assignee  of all or any  portion of a
Member  Interest,  but does  not  become a  Substitute  Member  and
desires  to make a  further  assignment  of such  Member  Interest,
shall be subject to all the  provisions  of this  Article IX to the
same extent and in the same  manner as any Member  desiring to make
an assignment of its Member Interest.

SECTION 9.6     Effect  of   Bankruptcy  or   Termination   of  a
                -------------------------------------------------
                Non-Managing Member.
                --------------------

      The   occurrence   of  an  Event  of   Bankruptcy   as  to  a
Non-Managing   Member  or  the  dissolution  or  termination  of  a
Non-Managing   Member   shall   not  cause   the   termination   or
dissolution  of the Company,  and the business of the Company shall
continue.  The  trustee  or  receiver  of a  bankrupt  Non-Managing
Member,  or its  representative  shall  have  the  rights  of  such
Member for the purpose of settling or  managing  its  property  and
such  power  as  the  bankrupt,   dissolved  or  terminated  Member
possessed  to assign all or any part of its Member  Interest and to
join with the assignee in  satisfying  conditions  precedent to the
admission of the assignee as a Substitute Member.
<PAGE>

SECTION 9.7     Month-End Convention.
                ---------------------

      For  purposes  of this  Agreement,  all  transfers  of Member
Interests  shall be  deemed  to take  place at the end of the month
in which the transfer actually occurs.

                                   ARTICLE X

                               AMENDMENTS; MERGER

SECTION 10.1    Amendments.
                ------------

      This  Agreement may be amended with the consent of a majority
of the Voting  Members  per  capita;  provided,  however,  that the
Wisconsin  public  utility  Affiliates  of WPSLLC and WPLLLC  shall
exercise all voting  rights with respect to the  interests  held by
such Persons and their  Affiliates;  and provided  further that the
following  amendments  shall  require  the  consent  of  all of the
Voting  Members  and,  if  any  proposed   amendment   pursuant  to
Sections  10.1(b),  (c) or (g) would accord different  treatment to
the  Members who are not Voting  Members  than those who are Voting
Members,  the  consent of a  majority  of  Members  (by  Percentage
Interest) who are not Voting Members:

(a)   any  amendment to modify the  provisions  of Section  3.2(g),
3.3,  3.4,  3.5,  3.6, or 9.3(a)  with  respect to the ability of a
Member to increase its Percentage Interest in the Company;

(b)   any  amendment  to  modify  the   provisions  of  Article  VI
relating  to  the   allocation   of  Profits  and  Losses  and  the
distribution  of  cash  to  Members,   except  in  accordance  with
Section  3.7;  provided,   however,  the  dividend  rate  shall  be
subject  to   adjustment  by  a  majority  vote  of  the  board  of
directors of the Corporate Manager;

(c)   any  amendment  of Section  3.8 or the method of  determining
the Tax-Exempt  Investment  Amount  (including the methodology used
in Schedule B);

(d)   any   amendment   that  would   impose  on  the  Members  any
obligation  to  make  additional   Capital   Contributions  to  the
Company;

(e)   any amendment that would remove the Corporate Manager;

(f)   any amendment to Section 2.7; or

(g)   any amendment to this Article X.

(h)   any  amendment  of a provision  hereto that  incorporates  or
embodies a provision of the Reliability 2000 Legislation.
<PAGE>

SECTION 10.2    Merger.
                --------

      Subject  to  any   applicable   regulatory   approvals,   the
Corporate  Manager,  without  the consent of the  Members,  may (i)
merge or  consolidate  the Company with or into any other  domestic
or foreign  partnership,  limited  partnership,  limited  liability
company  or  corporation  in  a  transaction  pursuant  to  Section
7.1(b),  (c)  or  (d)  hereof,  or  (ii)  sell  the  assets  of the
Company;  provided,  however,  that, until the third anniversary of
the Operations Date, any merger,  consolidation,  or sale of all or
substantially  all of the assets of the Company  shall  require the
consent of all the Voting Members.

                                   ARTICLE XI

                                  MISCELLANEOUS

SECTION 11.1    Notices.
                ---------

      All notices, consents,  requests, demands, offers, reports or
other  communications  required or permitted  to be given  pursuant
to this  Agreement  shall be in  writing  and  considered  properly
given or made when  personally  delivered  to the  person  entitled
thereto,  when sent by certified or  registered  United States mail
in a  sealed  envelope,  with  postage  prepaid,  or  when  sent by
overnight  courier,  addressed,  if to the Company,  at its address
set forth in Section  2.1,  and if to a Member,  to the address set
forth  opposite  such  member's  name on Schedule A. Any Member may
                                         ----------
change  his  address  by giving  notice to the  Corporate  Manager.
The  Company  may  change its  address by giving  notice to each of
its Members.

SECTION 11.2     Entire Agreement.
                -----------------

      This  Agreement   embodies  the  entire   understanding   and
agreement   among  the  Members   concerning   the   Company,   and
supersedes  any  and  all  prior  negotiations,  understandings  or
agreements with respect thereto.

SECTION 11.3    Interpretation and Construction.
                --------------------------------

      The headings and captions in this  Agreement are inserted for
convenience and  identification  only and are in no way intended to
define,  limit or expand the scope and intent of this  Agreement or
any provision  hereof.  The  references to Sections and Articles in
this   Agreement   are  to  the   Sections  and  Articles  of  this
Agreement,  except  where  otherwise  indicated.  Where the context
so  requires,  the  masculine  shall  include the  feminine and the
neuter, and singular shall include the plural.

SECTION 11.4    Counterparts.
                -------------

      This  Agreement  may  be  executed  in  multiple  counterpart
copies,  each of which shall be  considered  an original and all of
which shall constitute one and the same instrument.
<PAGE>

SECTION 11.5    Binding on Successors.
                ----------------------

      This  Agreement  and all of the terms and  provisions  hereof
shall be binding  upon,  and inure to the  benefit  of, the Members
and their respective successors and assigns.

SECTION 11.6    Severability.
                -------------

      If  any  provision  of  this  Agreement  or  the  application
thereof to any Person or  circumstance  shall,  to any  extent,  be
held invalid or  unenforceable  in any  jurisdiction,  the validity
and  enforceability  of the  remainder  of  this  Agreement  or the
application   of  such   provision   to  any   other   Persons   or
circumstances  shall not be affected  thereby,  and each  provision
of this  Agreement  shall be valid and  enforceable  to the  extent
permitted by law in every jurisdiction.

SECTION 11.7    Rights and Remedies.
                --------------------

      The  rights  and  remedies   provided   this   Agreement  are
cumulative,  and the use of any one  right or  remedy  by any party
shall  not  preclude  or waive  its  right to the use of any or all
other  rights and  remedies.  Such rights and remedies are given to
such  party in  addition  to any other  rights  and  remedies  such
party may have by law, rule, regulation or otherwise.

SECTION 11.8    Economic Benefit.
                -----------------

(a)   This  Agreement  evidences  the  intent of the  Members  with
respect to the matters  covered  hereby,  and  reflects  the agreed
allocation  of benefits  and burdens  among the  Members.  If, as a
consequence  of regulatory  reviews or approvals,  certain  changes
are  required,  the Members  agree to negotiate in good faith so as
to  restore,  as  much  as  practically   feasible,   the  original
allocation of benefits and burdens among the Members.

(b)   Each Member agrees that the  agreements  set forth herein and
in the other  documents  pertaining to the formation of the Company
and  the  Corporate  Manager  reflect  extensive  negotiations  and
compromises  among the  Members.  To that end,  each Member  agrees
that  any  filings  or  communications  by it with  any  regulatory
authority will not  contradict  the positions set forth herein,  in
the Asset Contribution  Agreement and Subscription  Agreement,  the
Amended and Restated  Articles of Incorporation  and By-laws of the
Corporate  Manager and the  Shareholders  Agreement,  and  further,
that  any  filings  or  communications  by it with  any  regulatory
authority  will support,  to the extent  applicable,  the positions
set forth  herein and in such  other  documents,  excluding  issues
concerning  the  Company's  tariff and  rates.  Each  Member  shall
retain  its  right  to  take   independent   legal  or   regulatory
positions  regarding  any other  aspect of the  Company,  including
its tariff and rates.

<PAGE>

      IN WITNESS  WHEREOF,  the parties  hereto have  executed this
Agreement as of the date set forth above.

                               ATC Management, Inc.

                               By:
                               ____________________________________
                               Name:
                               Title:

                               Wisconsin Electric Power Company

                               By:
                               ____________________________________
                               Name:
                               Title:

                               Wisconsin Power and Light Company,
                               for itself and as manager of WPL
                               TRANSCO LLC

                               By:
                               ____________________________________
                               Name:
                               Title:

                               Wisconsin Public Service
                               Corporation, for itself and as the
                               sole member of WPS INVESTMENTS, LLC

                               By:
                               ____________________________________
                               Name:
                               Title:

                               Madison Gas and Electric Company

<PAGE>

                               By:
                               ____________________________________
                               Name:
                               Title:

                               Wisconsin Public Power Inc.

                               By:
                               ____________________________________
                               Name:
                               Title:

                               Edison Sault Electric Company

                               By:
                               ____________________________________
                               Name:
                               Title:

                               South Beloit Water, Gas and
                               Electric Company

                               By:
                               ____________________________________
                               Name:
                               Title:

<PAGE>
<TABLE>
<CAPTION>

                                                                                                                         Schedule A

                    Member                      Initial Capital Contribution       Number of Units             Percentage Interest
                    -------                       or Contribution Value            ---------------             -------------------
                                                  --------------------------
<S>                                                        <C>                              <C>                        <C>
ATC Management Inc.                                        $______                        _____                        _____%
N16 W23217 Stone Ridge Dr.
Waukesha, WI  53187

Edison Sault Electric Company                              $______                        _____                        _____%
725 East Portage Avenue
Sault Ste. Marie, MI  49783

South Beloit Water, Gas and Electric Company               $______                        _____                        _____%
222 West Washington
Madison, WI  53703

Wisconsin Electric Power Company                           $______                        _____                        _____%
231 West Michigan Street
Milwaukee, WI 53203

WPLLLC                                                     $______                        _____                        _____%
c/o Wisconsin Power and Light Company
222 West Washington
Madison, WI 53703

WPS Investments, LLC                                       $______                        _____                        _____%
c/o Wisconsin Public Service Corporation
700 North Adams Street
[P.O. Box 19001, 54307]
Green Bay, WI 54034

Madison Gas and Electric Company                           $______                        _____                        _____%
P.O. Box 1231
Madison, WI 53701-1231

Wisconsin Public Power Inc.                                $______                        _____                        _____%
1425 Corporate Center Drive
Sun Prairie, WI 53590-9109

</TABLE>
<PAGE>

                                                          EXHIBIT A
                                                          ---------

              NOTICE OF EXERCISE OF REDEMPTION RIGHT

      In  accordance  with Section 8.4 of the  Operating  Agreement
(the  "Agreement")  of  American   Transmission  Company  LLC  (the
"Company"),  the  undersigned  hereby  irrevocably (i) presents for
redemption  ________  Member  Units in the  Company  in  accordance
with the terms of the Agreement and the  Redemption  Right referred
to in Section 8.4 thereof,  (ii)  surrenders  such Member Units and
all right,  title and interest  therein and (iii)  directs that the
Cash  Amount  or  Corporate   Shares  Amount  (as  defined  in  the
Agreement),  as determined by the Corporate  Manager (as defined in
the  Agreement),   deliverable  upon  exercise  of  the  Redemption
Right,  be  delivered  to  the  address  specified  below,  and  if
Corporate   Shares  (as  defined  in  the   Agreement)  are  to  be
delivered,  such  Corporate  Shares be  registered or placed in the
name(s) and at the address(es) specified below.

Dated:________ __, _____

Name of Member:

                               ______________________________
                               (Signature of Member)
                               ______________________________
                               (Mailing Address)
                               ______________________________
                               (City)    (State)   (Zip Code)

                               Signature Guaranteed by:
                               ______________________________

If    Corporate    Shares   are   to   be    issued,    issue   to:
______________________________

Please   insert   social    security   or    identifying    number:
__________________________

Name:______________________________________________________________
<PAGE>

                                                          EXHIBIT B
                                                          ---------

                               DISPUTE RESOLUTION

                                   PROVISIONS

                                   ARTICLE I

                          APPLICABILITY AND DEFINITIONS

SECTION 1.1     Applicability.
                ---------------

      The dispute  resolution  procedures set forth herein shall be
applicable,  under  the  conditions  hereinafter  provided,  to all
disputes  relating to the  interpretation  and  application  of the
terms and conditions of the Transco  Agreements  arising between or
among the  Members  (whether  as Members or as a party to a Transco
Agreement),   between  the  Members  and  the  Company;   provided,
however,  that these dispute resolution  procedures do not apply to
any matters  covered by the dispute  resolution  procedures  of the
OATT.  Nothing in this  Exhibit is  intended  to restrict or expand
existing state or federal laws or regulatory authorities.

SECTION 1.2     Definitions.
                -------------

      Capitalized  terms used herein and not defined  herein  shall
have  the  respective  meanings  assigned  to  such  terms  in  the
Operating  Agreement to which these Dispute  Resolution  Provisions
are  attached.  The  following  terms shall have the  meanings  set
forth below:

      "Committee"   means  the   Alternative   Dispute   Resolution
Committee  established  by the Board of Directors of the  Corporate
Manager in accordance with Article V to this Exhibit.

      "Corporate  Manager  Governing  Documents"  means the Amended
and  Restated  Articles of  Incorporation  and Amended and Restated
By-laws of the Corporate  Manager,  and the Shareholders  Agreement
between the Corporate  Manager and the Class B  Shareholders  named
therein, as the same may be amended from time to time.

      "FPA" means the Federal Power Act, as amended.

      "Members"  means the Members of the  Company,  including  the
Corporate Manager acting in its capacity as manager.

      "OATT" means open access  transmission  tariff of the Company
currently approved by FERC.

      "Transco  Agreements"  means  the  Operating  Agreement,  the
Asset Contribution  Agreements,  the Subscription  Agreements,  the
Corporate Manager Governing  Documents,  the Service Agreements for
Network   Integration    Transmission    Service,    Operations   &
Maintenance   Agreements,   Attachment   Agreements,   Transitional
Services     Agreement,      Network     Operating      Agreements,
Generation-Transmission         Interconnection         Agreements,
Transmission-Distribution   Interconnection   Agreements,   Alliant
Operating  Agreement,  Forming Party Agreement,  and all Schedules,
Exhibits and Appendices to such Agreements.
<PAGE>

                                   ARTICLE II

                     INFORMAL DISPUTE RESOLUTION PROCEDURES

SECTION 2.1     When Required.
                --------------

      Any  dispute  subject  to the  procedures  specified  in this
Exhibit shall be subject first to the informal  dispute  resolution
procedures specified herein.

SECTION 2.2     Procedures.
                -----------

(a)   The Company and each Member  shall  designate  an employee or
 representative  who shall be its  initial  contact  for  resolving
 disputes  involving  them as to matters  governed  by the  Transco
 Agreements.  Each party to such a dispute  shall  first  raise all
 issues  regarding the dispute with the  designated  representative
 of the other  party or parties  to such  dispute.  The  designated
 representatives  shall  work  together  to  resolve  the  relevant
 issues in a manner that meets the  interests of such  parties,  or
 until the issues are  referred to the  designated  officers of the
 parties as set forth in Section 2.2(b).

(b)   The Company and each Member shall designate a  representative
 who  shall  review  disputes  subject  to this  Exhibit  that  its
 designated  representatives  are unable to resolve. In the case of
 the Company,  this  officer  shall be  designated  by the Board of
 Directors of the Corporate  Manager.  The  applicable  officers of
 the  parties  involved  in such  dispute  shall work  together  to
 resolve  the  disputes  so  referred  in a manner  that  meets the
 interests  of  such  parties,  either  until  such  resolution  is
 reached,  or until an  impasse  is  declared  by any party to such
 dispute.

                                  ARTICLE III

                                   MEDIATION

SECTION 3.1     When Available.
                ---------------

      If the parties  agree,  any dispute  subject to this  Exhibit
may be subject to  non-binding  mediation  subsequent  to  informal
dispute  resolution,  but prior to the  initiation of  arbitration,
regulatory,  judicial,  or other  dispute  resolution  proceedings.
The parties  that elect  mediation  shall  notify the  Committee in
writing of the election to mediate.
<PAGE>

SECTION 3.2     Procedures.
                ------------

(a)   A  neutral  mediator  shall be  selected  by the Chair of the
 Committee  after  consultation  with the  parties  involved in the
 dispute.  The Chair of the  Committee  also may  consult  with the
 other  representatives  on the Committee  concerning the selection
 of a mediator.  The mediator  selected shall (i) be  knowledgeable
 in the subject  matter of the dispute,  and (ii) have no official,
 financial,  or personal  conflict of interest  with respect to the
 parties  or the  issues  involved  in  the  dispute,  unless  such
 interest is fully disclosed in writing to all parties  involved in
 the dispute and all such  parties  waive in writing any  objection
 to the interest.

(b)   The parties  involved in the  dispute  shall  attempt in good
 faith to resolve their dispute in accordance  with the  procedures
 and timetable  established by the mediator.  In furtherance of the
 mediation efforts, the mediator may, among other actions:

(i)   Require   representatives   of  such  parties  who  have  the
      authority  to settle  such  dispute to meet for  face-to-face
      discussions, with or without the mediator;

(ii)  Act as an intermediary between such parties;

(iii) Require such parties to submit  written  statements of issues
      and positions;

(iv)  Require such parties to exchange  relevant  information  with
      respect to the dispute; and

(v)   If  requested  by such  parties at any time in the  mediation
      process,  provide a written  recommendation  on resolution of
      the  dispute   including,   if  requested,   the   mediator's
      assessment  of the merits of the  principal  positions  being
      advanced by each such party.

(c)   If the  parties  are unable to resolve  the  dispute at or in
 connection with this meeting,  then, (i) any party involved in the
 dispute  may  commence  such  arbitration  proceedings,   or  such
 judicial,  regulatory,  or other proceedings as may be appropriate
 as permitted  by the  provisions  of Section 4.1 of this  Exhibit;
 (ii) the  statements  made by any  party in  connection  with such
 mediation   shall  not  be  admissible  for  any  purpose  in  any
 subsequent   arbitration,   administrative,   judicial   or  other
 proceeding;  (iii) the  recommendation  of the mediator shall have
 no  further  force or effect and shall not be  admissible  for any
 purpose in any subsequent arbitration,  administrative,  judicial,
 or other  proceeding;  and (iv) the  mediator may not be compelled
 to   testify   concerning   the   mediation   in  any   subsequent
 arbitration, judicial, or other proceeding.

SECTION 3.3     Costs.
                -------

      The costs of the time,  expenses,  and other  charges  of the
mediator and common costs of the  mediation  process shall be borne
by the parties  involved in the dispute,  with each side  (treating
all  parties  as aligned  with  either  the  plaintiff  side or the
defendant  side of the  dispute)  in the  mediated  matter  bearing
one-half of such costs.  Each party  involved in the dispute  shall
bear its own costs  and  attorney's  fees  incurred  in  connection
with any mediation under this Article III.
<PAGE>

                                   ARTICLE IV

                                   ARBITRATION

SECTION 4.1     When Required.
                --------------

      Any  dispute  subject  to this  Exhibit  that  has  not  been
resolved  through the  informal or mediation  procedures  specified
herein  shall be resolved by  arbitration  in  accordance  with the
procedures  specified herein;  provided,  however,  that unless all
parties  agree  to  arbitrate,  (a)  any  dispute  subject  to  the
jurisdiction  of any  regulatory  authority  shall only be heard by
such  regulatory  authority,  and (b) any dispute wherein one party
seeks an injunction or other  equitable  relief shall be heard only
by a court having jurisdiction over the matter.

SECTION 4.2     Initiation.
                ------------

(a)   A party to a  dispute  that  wishes to  commence  arbitration
 proceedings  shall  send a written  demand for  arbitration  to an
 officer or  managing or general  agent (or other agent  authorized
 by  appointment  or law to  receive  service of  process)  of each
 party to the dispute,  and to the secretary of the Committee.  The
 demand  for   arbitration   shall   state  each  claim  for  which
 arbitration is being  demanded,  the relief being sought,  a brief
 summary  of the  grounds  for such  relief,  and the basis for the
 claim, and shall identify all other parties to the dispute.

(b)     Any party  receiving  such  notice  may,  if the proviso in
 Section  4.1 is  applicable,  notify the  parties  to the  dispute
 within 14 days of receiving  the demand for  arbitration,  that it
 intends  to have the  matter  heard by a  regulatory  or  judicial
 authority and shall  thereafter have a further 60 days in which to
 make  the  necessary  filing  to  commence   proceedings  at  such
 regulatory  or  judicial  authority.  If the filing  necessary  to
 commence  proceedings before such regulatory or judicial authority
 is not made within the  foregoing  60-day  period,  then the party
 seeking to invoke jurisdiction of a regulatory  authority shall be
 deemed to have  consented to  arbitration,  and the dispute  shall
 revert to arbitration.

SECTION 4.3     Selection of Arbitrator.
                -------------------------

      The  Committee  shall  maintain  a list of  arbitrators  that
contains an odd number of names,  and  contains at least five names
of Persons whom the  Committee  believes are  generally  qualified,
by  reason  of  their   temperament  and  experience,   to  resolve
disputes  among  the  parties.  Upon an  arbitration  demand  being
made by one or more parties,  the Committee  shall provide the list
to the  parties  to the  dispute.  The party or  parties  demanding
arbitration  on the one hand,  and the party or parties  responding
to the demand for  arbitration  on the other,  shall each (treating
all  parties  as aligned  with  either  the  plaintiff  side or the
defendant  side of the  dispute)  take  turns  (with the  plaintiff
proceeding   first)   crossing   names  off  the  list   until  one
arbitrator  remains,  who shall  thereupon be engaged as arbitrator
with respect to the dispute.
<PAGE>

SECTION 4.4     Procedures.
                -----------

      The  Committee  shall  compile  and  make  available  to  the
arbitrator   and   the   parties   standard   procedures   for  the
arbitration  of disputes,  which may be modified or adopted for use
in a  particular  proceeding  as the parties  mutually  agree or as
the   arbitrator   deem   appropriate.   Upon   selection   of  the
arbitrator,   arbitration  shall  go  forward  in  accordance  with
applicable procedures.

SECTION 4.5     Intervention.
                -------------

      The  arbitrator  may permit any  Member to  intervene  in the
proceeding   upon  the  filing  of  a  timely   application   which
demonstrates  that the  Member has a direct  interest  that will be
materially  affected by the decision of the  arbitrator and that it
will not be  represented  adequately  by an  existing  party to the
proceeding.  Any Member  seeking to  intervene  in a dispute  shall
indicate in its  intervention  papers  whether it believes  that it
should be aligned with either the  plaintiff  side or the defendant
side of the dispute.  Any party to the dispute may  challenge  such
proposed  alignment.  The  arbitrator  shall  determine  the actual
alignment   of  the   parties   to  a   dispute   based   upon  the
comparability  of the  specific  positions  advanced  by each party
concerning the issues involved in the dispute.

SECTION 4.6     Summary Disposition and Interim Measures.
                -----------------------------------------

(a)   The procedures  for  arbitration of a dispute shall provide a
 means for  summary  disposition  of a demand for  arbitration,  or
 response  to a  demand  for  arbitration,  that  in  the  reasoned
 opinion of the arbitrator  does not have a good faith basis either
 in law or fact.  If the  arbitrator  determines  that a demand for
 arbitration,  or  response to a demand for  arbitration,  does not
 have a good  faith  basis  either in law or fact,  the  arbitrator
 shall have  discretion  to award the costs of the time,  expenses,
 and other charges of the arbitrator to the prevailing party.

(b)   The  procedures  for  the  arbitration  of  a  dispute  shall
 provide a means  for  summary  disposition  without  discovery  if
 there is no dispute as to any material  fact, or with such limited
 discovery as the arbitrator  shall determine is reasonably  likely
 to  lead  to the  prompt  resolution  of any  disputed  issues  of
 material fact.

(c)   The procedures for  arbitration of a dispute shall permit any
 party to a dispute to request the  arbitrator  to render a written
 interim  decision  requiring  that any action or decision  that is
 the subject of a dispute not be put into effect,  or imposing such
 other  interim  measures  as  the  arbitrator  deem  necessary  or
 appropriate,  to preserve  the rights and  obligations  secured by
 the Transco  Agreements  during the  pendency  of the  arbitration
 proceeding.  The  arbitrator  may  grant or  deny,  in whole or in
 part, a request for such a written interim  decision.  Members and
 the Company  shall be bound by any such written  decision  pending
 the outcome of the arbitration proceeding.

SECTION 4.7     Discovery of Facts.
                --------------------

(a)   The  arbitration  procedures  for the resolution of a dispute
 shall  include  adequate  provision  for the discovery of relevant
<PAGE>

 facts,  including the taking of testimony  under oath,  production
 of  documents  and things,  and  inspection  of land and  tangible
 items.   The  nature  and  extent  of  such  discovery   shall  be
 determined as provided  herein and shall take into account (i) the
 complexity  of the  dispute,  (ii) the  extent to which  facts are
 disputed, and (iii) the amount of money in controversy.

(b)   The arbitrator  shall be  responsible  for  establishing  the
 timing,  amount,  and  means  of  discovery,   and  for  resolving
 discovery and other  pre-hearing  disputes.  If a dispute involves
 contested  issues of fact,  promptly  after the  selection  of the
 arbitrator,  the arbitrator shall convene a meeting of the parties
 for the purpose of  establishing  a schedule and plan of discovery
 and other pre-hearing actions.

SECTION 4.8     Evidentiary Hearing.
                --------------------

      The procedures  established  by the arbitrator  shall provide
for   an    evidentiary    hearing,    with   provision   for   the
cross-examination  of witnesses,  unless all parties consent to the
resolution  of the  matter on the basis of a  written  record.  The
forms and  methods  for taking  evidence  shall be as agreed by the
parties,  or if the parties  cannot agree,  as  established  by the
arbitrator.  The  arbitrator  may  require  such  written  or other
submissions  from  the  parties  as shall  be  deemed  appropriate,
including  submission  of the  direct  testimony  of  witnesses  in
written  form.  The  arbitrator  may exclude any  evidence  that is
irrelevant,  immaterial, or unduly repetitious,  and, except to the
extent hereinafter  otherwise provided,  shall exclude any material
which   is   covered   by  the   attorney-client   privilege,   the
accountant-client  privilege,  other evidentiary privileges, or the
attorney-work  product  doctrine.  Any party or parties may arrange
for the  preparation of a record of the hearing and,  except to the
extent  otherwise  provided,  shall  pay the  costs  thereof.  Such
party or parties shall have no  obligation to provide,  or to agree
to the  provision  of, a copy of the  record of the  hearing to any
party  that does not pay a  proportionate  share of the cost of the
record.   At  the  request  of  any  party,  the  arbitrator  shall
determine  a fair  and  equitable  allocation  of the  cost  of the
preparation  of a  record  between  or  among  the  parties  to the
proceeding who are willing to share such costs.

SECTION 4.9     Confidentiality.
                -----------------

(a)   Any  information  requested  from another party in the course
 of an arbitration  proceeding,  and not otherwise available to the
 receiving  party,  including  any such  information  contained  in
 documents or other means of recording  information  created during
 the course of the proceeding,  may be designated "Confidential" by
 the producing  party to the extent that such  information  is of a
 proprietary  nature.  The  party  designating  documents  or other
 information as "Confidential"  shall have 20 days from the request
 for  such  material  to  submit a  request  to the  arbitrator  to
 establish such  requirements  for the protection of such documents
 or  other  information  designated  as  "Confidential"  as  may be
 reasonable  and  necessary  to  protect  the  confidentiality  and
 commercial  value  of  such  information  and  the  rights  of the
 parties.  Prior to the  decision  of the  arbitrator  on a request
 for  confidential   treatment,   documents  or  other  information
 designated    as    "Confidential"    need   not   be    produced.
 "Confidential"  information  shall not be used by the  arbitrator,
 or anyone  working for or on behalf of any of the  foregoing,  for
 any purpose other than the arbitration  proceeding,  and shall not
 be  disclosed  in any  form  to any  Person  not  involved  in the
 arbitration  proceeding  without the prior written  consent of the
 party   producing  the   information,   or  as  permitted  by  the
 arbitrator or as required by law.
<PAGE>

(b)   Any Person  receiving  a request  or demand  for  disclosure,
 whether by compulsory  process,  discovery request,  or otherwise,
 of  documents  or  information   obtained  in  the  course  of  an
 arbitration  proceeding that have been  designated  "Confidential"
 and that are subject to a  non-disclosure  requirement  under this
 Exhibit,  or that are  subject  to a decision  of the  arbitrator,
 shall  immediately  inform the Person  from which the  information
 was obtained,  and shall take all  reasonable  steps to afford the
 Person from which the  information  was obtained an opportunity to
 protect the information  from  disclosure.  Any person  disclosing
 information   in  violation   of  this  Exhibit  or   requirements
 established by the  arbitrator  shall be deemed to waive any right
 to introduce or otherwise  use such  information  in any judicial,
 regulatory,  or other  legal  or  dispute  resolution  proceeding,
 including the proceeding in which the information was obtained.

(c)   Nothing in this Exhibit shall  preclude any Person from using
 documents or information  properly and previously obtained outside
 of  an  arbitration  proceeding,  or  otherwise  public,  for  any
 legitimate purpose,  notwithstanding that the information was also
 obtained in the course of the arbitration proceeding.

SECTION 4.10    Timetable.
                ----------

      Promptly   after  the  selection  of  the   arbitrator,   the
arbitrator  shall set a date for  resolution of the dispute,  which
shall be not later than eight  months (or such  earlier date as may
be  agreed to by the  parties)  from the date of the  selection  of
the  arbitrator,  with  other  dates,  including  the  dates for an
evidentiary  hearing,  or other final submissions of evidence,  set
in light of this date.  The date for the  evidentiary  hearing,  or
other final  submission  of evidence,  shall not be changed  absent
extraordinary  circumstances.  The arbitrator  shall have the power
to  impose  sanctions  for  dilatory  tactics  or  undue  delay  in
completing the arbitration proceedings.

SECTION 4.11    Decisions.

      The  arbitrator  shall issue either an oral  decision that is
transcribed or a written  decision,  which may, at the arbitrator's
discretion,  include  findings of fact.  The  arbitration  decision
shall be based on (i) the  evidence in the record;  (ii) the  terms
of  the  relevant  Transco  Agreements,  including  any  principle,
standard,   requirement,   procedure,   plan,  or  other  right  or
obligation   established   by  or   pursuant   to   those   Transco
Agreements;  (iii) applicable  federal and state  legal  standards,
including  the FPA and any  applicable  state and FERC  regulations
and   decisions;   and,   (iv) relevant   decisions   in   previous
arbitration  proceedings  under the Transco  Agreements which shall
be  available  subject to  applicable  confidentiality  provisions.
All  decisions  of  the  arbitrator  shall  be  maintained  by  the
Committee  and  shall,  subject to any  applicable  confidentiality
provisions,  be made  available on request to all  Members,  to the
Company  and to  federal  and  state  regulatory  authorities.  The
arbitrator   shall  have  no  authority  to  revise  or  alter  any
provision  of  any  Transco  Agreement.  Any  arbitration  decision
that  affects  matters  subject  to the  jurisdiction  of the  FERC
under  section  205 or  section  206 of the FPA shall be filed with
the FERC and any  arbitration  decision that affect matters subject
to the  jurisdiction  of a state authority shall be filed with that
authority.
<PAGE>

SECTION 4.12    Costs.
                ------

      Unless the arbitrator  shall decide  otherwise,  the costs of
the time,  expenses,  and other charges of the arbitrator  shall be
borne  by  the  parties  to  the  dispute,  with  each  side  on an
arbitrated  issue  bearing  one-half of such costs,  and each party
to an  arbitration  proceeding  shall  bear its own costs and fees.
The   arbitrator  may  require  all  of  the  costs  of  the  time,
expenses,  and  other  charges  of the  arbitrator,  plus  all or a
portion  of the  costs of  arbitration,  attorneys'  fees,  and the
costs  of  mediation,  if  any,  to  be  paid  by  any  party  that
substantially  loses on an issue  determined  by the  arbitrator to
have been raised without a substantial basis.

SECTION 4.13    Enforcement.
                ------------

      The decision of the  arbitrator  shall be final,  binding and
not  appealable,  except  to the  extent  reviewable  by  FERC  (as
permitted  or  required  by law) or as  provided  in Chapter 788 of
the  Wisconsin  Statutes.  Any  party  may  petition  any  state or
federal  court  having  jurisdiction  to  enter  judgment  upon the
arbitration award.

SECTION 4.14    Regulatory Jurisdiction.
                ------------------------

      If a party  fails  to  invoke  regulatory  jurisdiction  of a
dispute  involving  matters  subject  to FERC or  state  regulatory
jurisdiction  within  60 days in  accordance  with  Section  4.1 of
this  Exhibit,  the party  shall be deemed to have waived its right
to invoke such jurisdiction;  provided,  however,  that this waiver
only  applies  to the party and does not  affect any right that the
FERC or  state  regulatory  authority  may  have to act on its own.
If  such  party  nonetheless   invokes  FERC  or  applicable  state
regulatory   jurisdiction  following  the  arbitration  proceedings
provided  for  herein,  that  party  shall be  responsible  for all
attorneys'  fees  incurred by other  parties to the dispute and the
Company,  whether  or not the  FERC or state  regulatory  authority
concludes  that such party has  waived its right to invoke  FERC or
state regulatory jurisdiction.

                                   ARTICLE V

                     ALTERNATE DISPUTE RESOLUTION COMMITTEE

SECTION 5.1     Membership.
                -----------

(a)   The  Committee  shall  be  composed  of  six  representatives
 selected  by the  Board of  Directors  of the  Corporate  Manager,
 which  shall  use its best  efforts  to  select a  Committee  that
 reflects  the  diversity,  in terms of size,  type of entity,  and
 geographic   location,   of  the   Members.   No  more   than  one
 representative  on the  Committee may be a  representative  of the
 same Member.

(b)   Representatives  on the  Committee  shall  serve for terms of
 three  years,  beginning  on the first day of the month  following
 the  annual  meeting  of the  Board of  Directors,  and may  serve
 additional  terms,  except  that,  of  the  representatives  first
 elected to the Committee,  two  representatives  shall serve terms
 of one year,  and two  representatives  shall  serve  terms of two
 years.
<PAGE>

SECTION 5.2     Voting Requirements.
                ---------------------

      Approval  of adoption  of  measures  by the  Committee  shall
require  two-thirds  of the  votes of the  representatives  present
and voting,  but in no event less than three votes.  Two-thirds  of
the  representatives  on the  Committee  shall  constitute a quorum
for the conduct of the business of the Committee.

SECTION 5.3     Officers.
                ---------

      At the first  meeting of the  Committee  following the annual
meeting  of the  Board of  Directors,  the  representatives  on the
Committee  shall  choose a Chair  and Vice  Chair  from  among  the
representatives  on the  Committee.  The Chair  and the Vice  Chair
shall each serve a term of three years,  unless earlier  terminated
by a  two-thirds  vote  of the  representatives  of the  Committee.
The  Chair  of the  Committee  shall  preside  at  meetings  of the
Committee,  and  shall  have  the  power  to call  meetings  of the
Committee  and to exercise  such other  powers as are  specified in
this Exhibit or authorized by the Committee.

SECTION 5.4     Meetings.
                ----------

      The  Committee  shall  meet  at  such  times  and  places  as
determined  by the  Committee,  or at the  call of the  Chair.  The
Chair  shall call a meeting of the  Committee  upon the  request of
two or more members of the Committee.

SECTION 5.5     Responsibilities.
                -----------------

      The duties of the Committee include,  but are not limited to,
the following:

(a)   Maintain  a pool of  persons  qualified  by  temperament  and
 experience,  and with  technical  or legal  expertise  in  matters
 likely to be the subject of  disputes,  to serve a  mediators  and
 arbitrators under this Exhibit;

(b)   Determine  the rates and other costs and  charges  that shall
 be paid to mediators and arbitrators  for, or in connection  with,
 their services;

(c)   Select mediators for disputes;

(d)   Determine  if  mediation  is not  warranted  in a  particular
 dispute;

(e)   Provide  to  the  parties  involved  in a  dispute  lists  of
 arbitrators  qualified by  temperament  and  experience,  and with
 appropriate  technical or legal expertise,  to resolve  particular
 disputes,  such lists to include only neutral  persons who have no
 official,  financial, or personal interest or conflict of interest
 with respect to the parties or the issues involved in the dispute;

(f)   Compile  and make  available  to  Members,  arbitrators,  and
 other interested parties suggested  procedures for the arbitration
 of disputes in accordance with Section 4.4 of this Exhibit;
<PAGE>

(g)   Maintain   and  make   available   to   Members,   mediators,
 arbitrators,   and  other  interested  parties,   subject  to  any
 applicable  confidentiality   provisions,  the  written  decisions
 required by Section 4.11 of this Exhibit;

(h)   Establish  such  procedures  and  schedules,  in  addition to
 those specified  herein,  as it shall deem  appropriate to further
 the  prompt,   efficient,   fair,  and  equitable   resolution  of
 disputes; and

(i)   Provide  such  oversight  and   supervision  of  the  dispute
 resolution  processes and procedures  instituted  pursuant to this
 Exhibit  as  may  be   appropriate   to  facilitate   the  prompt,
 efficient, fair, and equitable resolution of disputes.

SECTION 5.6     American Arbitration Association.
                ----------------------------------

      Whenever  the  Company is a party to any  dispute,  any party
whose  interests  are not aligned  with the Company may demand that
the  Committee  instruct the American  Arbitration  Association  to
provide  the  parties  with  a  list  of  arbitrators  pursuant  to
Section  4.3 in  lieu  of  the  Company  supplying  such  list.  In
addition,  in  connection  with such dispute,  the Committee  shall
not  perform any of those  responsibilities  charged to it pursuant
to  Section  5.5 and the  dispute  shall  instead  be  resolved  in
accordance with the arbitration  rules of the American  Arbitration
Association for the resolution of commercial disputes.EXHIBIT 10.33

                          ALLIANT ENERGY

                            EXCESS PLAN

                           November 2000

                                                     01/25/01
<PAGE>

                          ALLIANT ENERGY
                            EXCESS PLAN
                            -----------

                             PREAMBLE
                             --------

The Alliant Energy Excess Plan (the "Excess Plan") is designed to
attract, retain and motivate key executives and employees by
providing competitive retirement benefits.   The Plan compensates
Participants for the loss in benefits payable from the Alliant
Energy Cash Balance Pension Plan (the "Qualified Plan") resulting
from application of Internal Revenue Code sections 401(a) (17)
and 415, and exclusion of amounts deferred under "Key Employee
Deferred Compensation Plans" from the compensation used for
determining benefits under the Qualified Plan.

The Excess Plan is an unfunded plan for purposes of the Employee
Retirement Income Security Act of 1974, as amended; however,
nothing herein shall prevent the Company, in its sole discretion,
from establishing a trust of the type commonly known as a "rabbi
trust" to assist in meeting its obligations under the Plan. It is
a nonqualified plan for purposes of Section 401 of the Internal
Revenue Code of 1986, as amended.

This plan is effective on August 1, 1998.

<PAGE>

                          ALLIANT ENERGY
                            EXCESS PLAN
                            -----------

                             ARTICLE I
                             ---------

                            DEFINITIONS
                            -----------

Whenever used herein with the initial letter capitalized, words
and phrases shall have the meanings stated below unless a
different meaning is plainly required by the context.  All
masculine terms shall include the feminine and all singular terms
shall include the plural in all cases in which they could thus be
applied unless the context clearly indicates the gender or the
number.

1.1   "Accrued Normal Retirement Benefit" means the amount of a
      Participant's Retirement Benefit, determined as of the date
      of his termination of employment, commencing as soon as
      administratively practicable following that date, and
      payable as an annuity in the normal form of payment
      available to the Participant under the Qualified Plan (or
      the Actuarial Equivalent of such amount when payable in
      another form).  The amount of the Accrued Normal Retirement
      Benefit is defined in section 3.1.

1.2   "Actuarial Equivalent" means the procedure for converting a
      Participant's Accrued Normal Retirement Benefit to a single
      lump sum or to an optional form of payment, as defined in
      the Alliant Energy Cash Balance Pension Plan.

1.3   "Administrator" means the Employee Total Compensation
      Committee, as authorized by the Company to control and
      manage the operation and administration of this Plan under
      the definition and applicable provisions set forth in the
      Alliant Energy Cash Balance Pension Plan.

1.4   "Affiliate" means any entity that meets the definition of
      "Affiliate" set forth in the Alliant Energy Cash Balance
      Pension Plan.

1.5   "Board" or "Board of Directors" means the Board of Directors
      of the Company.

1.6   "Code" means the Internal Revenue Code of 1986, as amended,
      and the regulations thereunder.

1.7   "Committee" means the Compensation and Personnel Committee
      of the Board.

1.8   "Company" means Alliant Energy Corporate Services, Inc. and
      any successor or successors thereto.

1.9   "Compensation" means an employee's wages from a
      Participating Employer, as defined in the Cash Balance
      Pension Plan, but also including amounts excluded from the
      Cash Balance Pension Plan's definition of compensation by
      the operation of Code section 401(a)(17) and due to
      deferrals under the Key Employee Deferred Compensation Plans.

(1)   For purposes of calculating Average Monthly Compensation
           under the continuing provisions of the IES Pension Plan
           set forth in Appendix D of the Cash Balance Pension
           Plan, "Compensation" shall have the same meaning as
           provided under those provisions, except that any
           amounts excluded by operation of Code section
           401(a)(17)  or due to deferrals under the Key Employee
           Deferred Compensation Plans will be included as
           "Compensation."
<PAGE>

(2)   For purposes of calculating "Average Monthly Compensation"
           under the continuing provisions of the of the
           Interstate Power Company Retirement Income Plan set
           forth in Appendix E of the Cash Balance Pension Plan,
           "Compensation" shall have the same meaning as provided
           under those provisions, except that any amounts
           excluded by operation of Code section 401(a)(17) or due
           to deferrals under the Key Employee Deferred
           Compensation Plans will be included as "Compensation."

(3)   For purposes of calculating "Pension Wages" under the
           continuing provisions of the Wisconsin Power and Light
           Company Retirement Plan A set forth in Appendix C of
           the Cash Balance Pension Plan, "Compensation" shall
           have the same meaning as provided under those
           provisions, except that any amounts excluded by
           operation of Code section 401(a)(17) or due to
           deferrals under the Key Employee Deferred Compensation
           Plans will be included as "Compensation."

1.10  "Excess Plan Cash Balance Account" means the notational
      accounts established for all Participants strictly for
      purposes of determining benefits under this Excess Plan.

1.11   "Key Employee Deferred Compensation Plans" means the
      Alliant Energy Key Employee Deferred Compensation Plan, the
      Wisconsin Power & Light Company Deferred Compensation Plans,
      and the IES Utilities Key Employee Deferred Compensation
      Plan.

1.12  "Normal Retirement Age" has the same meaning that appears in
      the Alliant Energy Cash Balance Pension Plan.

1.13  "Normal Retirement Date" has the same meaning that appears
      in the Alliant Energy Cash Balance Pension Plan.

1.14  "Participant" means an employee who has been determined by
      the Participating Employer to be eligible to participate in
      the Plan in accordance with Article II or who has entered
      into the Plan, and who has not ceased to have rights to a
      Retirement Benefit hereunder.

1.15  "Participating Employer" has the same meaning that appears
      in the Alliant Energy Cash Balance Pension Plan.  The term
      also includes any successor corporation or firm which shall,
      by written agreement, assume the obligations of this Plan.

1.16  "Plan" means the Alliant Energy Excess Plan, as set forth
      herein, and as it may be amended from time to time.

1.17  "Plan Effective Date" means August 1, 1998.

1.18  "Plan Year" means August 1 through December 31, 1998, and
      every calendar year (January 1 through December 31)
      thereafter.

1.19  "Qualified Plan" means the Alliant Energy Cash Balance
      Pension Plan, which is qualified under Code Section 401(a).
<PAGE>

1.20  "Retirement Benefit" means a pension or any other payment or
      payments payable under the terms of this Plan to a
      Participant or the Participant's Spouse.

1.21  "Retirement Date" means the date on which a Participant's
      Retirement Benefit commences.

1.22   "Spouse" means an individual who is legally married to a
      Participant as of the earlier of the date of the
      Participant's death or the Participant's Retirement Date.

<PAGE>

                            ARTICLE II
                            ----------

                           PARTICIPATION
                           -------------

2.1   Participating Employees.  Each employee: (1) who is a
      ------------------------
      Participant in the Qualified Plan on or after January 1,
      1999 and (2) whose benefits or compensation under the
      Qualified Plan are limited due to the application of Code
      sections 401(a)(17), 415(b), or 415(e) or due to deferrals
      under the Key Employee Deferred Compensation Plans.  Each
      Participant's right to benefits under this Plan shall vest
      in accordance with Article V hereof.

2.2   Cessation of Participation.  A Participant shall cease to be
      ---------------------------
      an active Participant in this Plan and such Participant
      shall become an inactive Participant as of the date such
      Participant ceases to be an Employee of a Participating
      Employer, if they are not vested in accordance with Article
      V.

<PAGE>

                            ARTICLE III
                            -----------

                 FORM AND AMOUNT OF PLAN BENEFITS
                 --------------------------------

3.1   Accrued Normal Retirement Benefit.  The Accrued Normal
      ----------------------------------
      Retirement Benefit payable to a Participant shall be a
      single lump sum distribution, payable as soon as
      administratively practicable after the Participant's date of
      termination of employment.  The Accrued Normal Retirement
      Benefit shall equal the excess, if any of (a) over (b),
      where:

(a)   equals the total benefit otherwise payable to a Participant
           under the terms of the Qualified Plan, but such benefit
           shall be based on the definition of Compensation that
           appears in this Excess Plan and without regard to the
           Code section 415 or the requirements set forth in
           article 8 of the Qualified Plan, and

(b)   equals the actual benefit payable to the Participant under
           the Qualified Plan.

3.2   No Duplication between Excess Plan and Supplement Retirement
      -------------------------------------------------------------
      Agreement.  Strictly for purposes of determining the amount,
      -----------
      if any, of benefit payable to an employee in accordance with
      a Supplemental Retirement Agreement between such employee
      and the Company, benefits payable to such employee from this
      Excess Plan will be combined with benefits payable from the
      Qualified Plan and any other offsets, if any, with the
      effect that there shall be no duplication of benefits
      between the Excess Plan and any Supplemental Retirement
      Agreement.

3.3   Notational Excess Plan Cash Balance Accounts.  Strictly for
      ---------------------------------------------
      purposes of determining benefits under the Excess Plan,
      notational Excess Plan Cash Balance Accounts shall be
      established for all Participants.  No Company funds or
      assets shall be used to fund these accounts.  Benefit
      payments will be made from the Company's general assets when
      due.

3.4   Timing of Payment.  All payments shall begin as soon as
      ------------------
      administratively practical following a Participant's
      termination of employment with a Participating Employer.

3.5   Normal Form of Retirement Benefit Payment.  A Participant's
      -----------------------------------------
      Accrued Normal Retirement Benefit shall be paid as a lump
      sum distribution unless the Participant elects one of the
      Optional Forms of Benefit at least 12 months before the
      Participant's date of termination of employment.

      Notwithstanding anything to the contrary herein, the
      Employee Total Compensation Committee, may in its sole
      discretion, authorize or decline Optional Forms of Benefit
      where the election of such Optional Form of Benefit is
      received on or before December 1, 2000.

      Notwithstanding anything to the contrary herein, the
      Employee Total Compensation Committee, may in its sole
      discretion, determine that a lump sum payment shall be made
      in lieu of any small annuity payments.

3.6   Optional Forms of Benefit.   In lieu of the normal form of
      -------------------------
      to receive the Actuarial Equivalent of his benefit under any
      of the Normal or Optional Forms of Benefit available to the
      Participant under the Qualified Plan.

3.7   Treatment of Payments Under Other Plans.  Benefits earned by
      ----------------------------------------
      a Participant under this Plan shall not be considered
      "Compensation" as that term is defined in other Alliant
      Energy  Plans.

<PAGE>

                            ARTICLE IV
                            ----------

                 DEATH BENEFITS BEFORE RETIREMENT
                 --------------------------------

4.1   Preretirement Death Benefits.  If the Participant dies
      -----------------------------
      before retirement, the Plan provides a Preretirement Death
      Benefit to his surviving Spouse or designated Beneficiary.
      This benefit shall be equal to the Actuarial Equivalent
      present value of the Participant's Excess Plan Cash Balance
      Account and payable in a single lump sum as soon as
      administratively feasible following the Participant's death.

4.2   Beneficiary Designation.  A Participant may designate any
      ------------------------
      person or persons, including a trust, as the Beneficiary or
      Contingent Beneficiary to receive this Preretirement Death
      Benefit.  A beneficiary designation shall be made in a
      manner approved by the Administrator.  The Participant may
      change or cancel this designation at any time prior to
      death.  If a Participant fails to designate a Beneficiary,
      the benefits payable on account of the Participant's death
      shall be paid to the Participant's surviving Spouse, or, if
      none, to the Participant's estate.

<PAGE>

                             ARTICLE V
                             ---------

                              VESTING
                              -------

5.1   Vesting.  A Participant shall vest in his entire Accrued
      --------
      Normal Retirement Benefit according to the vesting
      provisions set forth in Article 3 of the Qualified Plan.

<PAGE>

                            ARTICLE VI
                            ----------

                   PAYMENT OF RETIREMENT BENEFIT
                   -----------------------------

6.1   Survival.  Payment of any Retirement Benefit hereunder which
      ---------
      is contingent upon the survival of the payee shall cease
      with the last payment due the payee before the payee's death.

6.2   Administrative Powers Relating to Payments.  If a
      -------------------------------------------
      Participant or Spouse is under a legal disability or, by
      reason of illness or mental or physical disability, is
      unable, in the opinion of the Committee, to attend properly
      to such Participant's personal financial matters, the
      Committee may make such payments in such of the following
      ways as the Committee shall direct:

(a)   Directly to such Participant or Spouse;
(b)   To the legal representative of such Participant or Spouse; or
(c)   To some relative by blood or marriage, or friend, for the
        benefit of such Participant or Spouse.

      Any payment made pursuant to this section 6.2 shall be in
     complete discharge of the obligation for such payment under
     the Plan.

6.3   Restrictions Upon Assignments and Creditors' Claims.  Except
      -----------------------------------------------------
      as otherwise provided in the Plan, no Participant, former
      Participant or any Spouse, or the estate of any such person,
      shall have the power to assign, pledge, encumber or transfer
      any interest in the Plan while the same shall be possession
      of the Company.  Any such attempt at alienation shall be
      void.  No such interest shall be subject to attachment,
      garnishment, execution, levy or any other legal equitable
      proceeding or process and any such attempt shall be void.

6.4   Incompetency.  If a person receiving payments under this
      -------------
      Plan is determined mentally to be incompetent by a court of
      competent jurisdiction, any remaining benefit payments under
      this Plan will be made to the court-appointed guardian or
      conservator.

6.5   Claim for Benefits.  To receive benefits, the Participant or
      ------------------
      Beneficiary must file a written claim with the Committee on
      forms provided by the Committee.  The Participant shall be
      subject to the same application procedures that apply to the
      Alliant Energy Cash Balance Plan.   If a claim for benefits
      is denied, in whole or in part, the claimant will receive a
      notice that states (1) the specific reason or reasons for
      the denial; (2) refers to relevant provisions of the Plan
      documents on which the denial is based; (3) describes and
      explains the needs for any additional material or
      information that the claim must supply to validate his
      claim; and (4) explains the steps that the claimant must
      take to submit his claim for review.

6.6   Right to Appeal.  If a Participant's request for benefits is
      ----------------
      denied, the Participant has the right to appeal the denial
      in writing by following the Claim Appeal Procedures outlined
      in section 11.3 of the Alliant Energy Cash Balance Plan.

<PAGE>
                            ARTICLE VII
                            -----------

                        GENERAL PROVISIONS
                        ------------------

7.1   Continuation of the Plan.  The Plan shall be binding upon
      --------------------------
      the Company and any successors or assigns of the Company
      including any corporation with or into which the Company or
      its successors or assigns shall consolidate or merge and any
      transferred of substantially all of the assets of the
      Company or its successors or assigns.

7.2   Right to Amend, Suspend or Terminate.  The Company reserves
      --------------------------------------
      the right at any time and from time to time to amend,
      suspend or terminate the Plan by action of its Board of
      Directors without the consent of any Participant, Spouse, or
      other persons claiming a right under the Plan.  No amendment
      of the Plan shall reduce the benefits of any Participant
      below the amount to which such Participant has become vested
      pursuant to section 5.1 prior to the date of amendment.

7.3   Rights to Benefits and Possible Forfeitures.  No person
      --------------------------------------------
      shall have any right to a benefit under the Plan except as
      such benefit has accrued to such person in accordance with
      the terms of the Plan, and such right shall be no greater
      than the rights of any unsecured general creditors of the
      Company.  Notwithstanding any other provisions of this Plan,
      if a Participant shall be terminated for cause, all of such
      Participant's rights to benefits under this Plan shall be
      forfeited.  The Board of Directors shall determine whether a
      Participant has been terminated for cause.  For purposes of
      this Plan, "cause" includes, but is not limited to (i)
      embezzlement of company funds; (ii) fraud; and (iii) acts
      that cause harm to the company or its reputation.

7.4   Titles. The titles of the Articles and sections herein are
      --------
      included for convenience of reference only and shall not be
      construed as part of this Plan, or have any effect upon the
      meaning of the provisions hereof.

7.5   Separability.  If any term or provision of this Plan as
      -------------
      presently in effect or as amended from time to time, or the
      application thereof to any payments or circumstances, shall
      to any extent be invalid or unenforceable, the remainder of
      the Plan, and the application of such term or provisions to
      payments or circumstances other than those as to which it is
      invalid or unenforceable, shall not be affected thereby, and
      each term or provision of the Plan shall be valid and
      enforced to the fullest extent permitted by law.

7.6   Authorized Officers.  Whenever the Company under the terms
      --------------------
      of the Plan is permitted or required to do or to perform any
      act or matter or thing, it shall be done and performed by
      any officer duly authorized by the Board of Directors of the
      Company, provided that the authority to approve Participants
      shall be bested in the Committee.

7.7   No Contract of Employment.  Nothing herein contained shall
      -------------------------
      be construed to constitute a contract of employment between
      any Participating Employer and any Employee.  The employment
      records of the Participating Employers and the Company's
      records shall be final and binding upon all Employees as to
      liability and participation.

7.8   Data.  It shall be a condition precedent to the payment of
      ------
      all benefits under the Plan that each Participant, former
      Participant and Spouse must furnish to the Company such
      documents, evidence or information as the Company considers
      necessary or desirable for the purpose of administering the
      Plan, or to protect the Company.

7.9   Applicable Law.  The Plan shall be construed and
      ---------------
      administered in accordance with the laws of Wisconsin to the
      extent such laws are not preempted by ERISA.

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