AMENDED AND RESTATED AGREEMENT FOR CONSTRUCTION AND OPERATION OF COLUMBIA GENERATING PLANT

EXHIBIT 10.9

AMENDED AND RESTATED

AGREEMENT FOR CONSTRUCTION AND OPERATION
OF COLUMBIA GENERATING PLANT

Wisconsin Power and Light Company,

Wisconsin Public Service Corporation, and,

Madison Gas and Electric Company

THIS AGREEMENT is made and entered into this 17 day of January, 2007, by and between Wisconsin Power and Light Company, a Wisconsin corporation (“Power Company”), Wisconsin Public Service Corporation, a Wisconsin corporation (“Service Company”), and Madison Gas and Electric Company, a Wisconsin corporation (“Electric Company”), the parties collectively being referred to as the “Companies”.

BACKGROUND

A.  The Companies own as tenants-in-common two generating units known as the “Columbia Plant” and an associated 345 KV substation.  Over approximately the past thirty years the parties have entered into a number of agreements and amendments to those agreements with respect to the Columbia Plant, which are listed on the attached Exhibit A (collectively, the “Prior Columbia Agreements”).

B.  The Companies have decided for convenience to amend, restate, and consolidate the Prior Columbia Agreements into this one Agreement.

Accordingly, the Companies agree that:

Paragraph 1.

Ownership Shares . The Companies hereby provide for the acquisition of a site and the construction and operation of a fossil fuel fired plant and associated 345 KV Substation, consisting of a 1975 Unit and a 1978 Unit, each of approximately 527,000 KW name-plate capacity to be located near Portage, Wisconsin, all to be owned by the Companies as tenants in common with undivided ownership interest as follows (in this Agreement referred to as their respective “Ownership Shares”):

(a)

The Ownership Shares of the 1975 Unit shall be:

(b)

The Ownership Share of the Columbia Plant (the 1975 and 1978 Units) shall be:

(c)

The approximate Ownership Shares of the 1978 Unit to attain the above Columbia Plant ownership shares are:

(d)

The Ownership Shares of the 345 KV substation (as hereinafter defined) shall at all times be:

Paragraph 2.

Construction Committee .  Construction of the Columbia Plant and 345 KV Substation shall be carried out by the Companies under the direct supervision and direction of Power Company and under the general policy supervision and direction of a Construction Committee to be established by the Companies.  All of the Companies shall be represented on the Construction Committee and the voting power of the representatives of each Company shall be in proportion to the Ownership Share of such Company of the Columbia  Plant as provided in Paragraph 1(b) above.  The vote of the representatives of Companies having Ownership Shares aggregating more than 50% shall be controlling on any question to be determined by the Construction Committee.  The Companies and their representatives on the Construction Committee shall use their best efforts toward the end that the 1975 Unit will be completed, and commercial operation commenced, on or about March 1, 1975, and the 1978 Unit will be completed, and commercial operation commenced, on or about June 1, 1978.

Paragraph 3.

Scope of Project . The Columbia Plant and 345 KV Substation to be so owned in common shall consist of the site and all property of the character of the electric plant, as defined in the Uniform System of Accounts referred to in Paragraph 6 hereof which shall be included in the general or detailed 1975 and 1978 Units and site plans approved from time to time by the Construction Committee, including cooling lake and cooling tower facilities and any off-site railroad lines or unit train facilities approved by the committee in connection with the project.  The 345 KV substation facilities to be owned in common (hereinafter called collectively “345 KV Substation”) shall consist of the following assets:  the generation step-up transformers and associated disconnect switches, other structures, equipment and facilities necessary either to support the generation function of the substation or the generation and transmission functions of the substation (but not structures, equipment and facilities necessary to support only the transmission functions of the substation), and land.

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Paragraph 4.

Contracts and Agency Authorization .  The Companies shall, with reasonable expedition, enter into or authorize the entry on their behalf into contracts (which may be purchase order contracts) providing for (a) the purchase or acquisition of a site or an addition to a site, materials, equipment and service for, and construction of, the Columbia Plant and 345 KV Substation, and (b) insurance to insure all work under construction against risks usually insured against for such work.  Each such contract shall provide, among other things, that the performance of the contract shall be for the account of, and the charges therefor shall be billed to, and paid by the Companies in proportion to their respective Ownership Shares and that the invoices for such billing (Contractor’s Invoice or Invoices) shall be submitted in the names of the Companies, in the care of Power Company.

The Companies agree that Power Company shall be authorized agent for the Companies to negotiate and execute any and all such contracts and also to apply for and conduct such regulatory proceedings and make such filings as may be required in connection with the construction or operation of the Columbia Plant and 345 KV Substation; and the Companies shall execute such separate agency authorizations as may be convenient to evidence such authority.

Power Company undertakes and agrees that all contracts made and all other actions by it as such agent will be made and done in accordance with good utility practices and in conformity with the determinations of general policy made by the Construction Committee constituted as provided in Paragraph 2 of this Agreement. As soon as practicable after entry into any contract, modification or cancellation which affects any significant commitment or other obligation of the parties hereto or after the making of filings with regulatory agencies on behalf of other Companies or the making of decisions involving substantial policy, Power Company shall give notice thereof to each of the other parties hereto and shall provide such copies or summaries as may be necessary for the accounting and other records of the parties.

The contract and regulatory agency agreements for the 1978 Unit dated August 30, 1972 are hereby amended, with respect to ownership shares, to conform to the ownership shares stated in 1(c) and 1(d) above.

Paragraph 5.

Books and Records .  Books of account and records containing details of the items of cost applicable to the construction of the Columbia Plant and 345 KV Substation and to its operation and maintenance shall be kept by the Operating Company referred to in Paragraph 9 and shall be open to examination at any time by the other Companies or their representatives. The Operating Company shall furnish the Companies with summaries or counterparts of such books of account and records as may be necessary to satisfy all applicable regulatory requirements.

Paragraph 6.

Expenditures .  All expenditures in respect of the Columbia Plant and 345 KV Substation shall be accounted for in accordance with the Uniform System of Accounts prescribed by the Federal Power Commission for Public Utilities and Licensees (Class A and B Electric Utilities).

All expenditures (including, but not limited to, expenditures for a site, any addition to a site, administration, labor, special training costs, payroll taxes, employee benefits, maintenance, material,  research and development, supplies and service), for the licensing,

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construction, operation, and maintenance of the Columbia Plant and 345 KV Substation and for renewals, replacements, additions and retirements in respect thereof shall be shared by the Companies in proportion to their Ownership Shares.  Expenditures of Power Company incurred prior to or after the date of this Agreement in connection with preliminary planning for the Columbia Plant and 345 KV Substation shall be treated as expenditures on behalf of all the Companies and the other Companies shall reimburse Power Company for their respective ownership proportions of the cost thereof. Expenditures of Power Company heretofore incurred in acquiring a site shall be treated as expenditures on behalf of all of the Companies, and the other Companies shall reimburse Power Company for their respective ownership proportion of the book cost thereof.

Interest charges on borrowed funds, income taxes, and property, business and occupation and like taxes, of each Company shall be borne entirely by such Company; and such items, as well as depreciation, amortization, and interest charged to construction, shall not be deemed expenditures for purposes of this Paragraph 6.

Paragraph 7.

Funds .  Whenever and so long as the Operating Company or a majority of the Companies may so demand, the Companies shall maintain a separate joint account or accounts for the Columbia Plant and 345 KV Substation (collectively, the “Joint Account”) in a bank or banks approved by the Operating Company, the title of which Joint Account shall be in the respective Companies in proportion to their Ownership Shares. While so maintained and unless otherwise agreed by the Companies, all construction and capital expenditures, and all other expenditures referred to in the second subparagraph of Paragraph 6, shall be paid out of the Joint Account.

From time to time the Operating Company may request the Companies to advance such amount as is then needed for cash working capital for the Columbia Plant and 345 KV Substation project. Within ten days thereafter, or from time to time as specified in such request, the Companies, pro rata according to their respective Ownership Shares, shall deposit the amount specified in such request. Such deposit shall be made in the Joint Account, if such accounts are being maintained at the time for such purpose; otherwise, such deposit shall be made to the credit of the Operating Company in a bank designated by it.

As promptly as practicable after the end of each month, the Operating Company shall send to each of the Companies a statement in reasonable detail of all expenditures for such month and the amount of each Company’s share thereof.

The Operating Company shall cause to be drawn and to be delivered on behalf of the Companies, from funds so provided, checks or drafts in payment of expenditures.  Funds so provided shall be disbursed in accordance with sound accounting and disbursement procedures. All persons authorized to handle or disburse funds from the Joint Account shall be bonded in favor of the Companies as their respective interests may appear, for such amounts as the Construction Committee may determine.  The Operating Company accepts sole responsibility for the handling or disbursement of funds deposited to its credit.

Paragraph 8.

Default .  During any period that a Company is in default in whole or in part in performing any of its obligations under this Agreement, such Company shall be obligated to pay any damages to the non-defaulting Companies resulting from the default, and in

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case of a default in making any payment then required under this Agreement, (a) such Company shall be entitled to no energy from the 1975 and/or 1978 Units during such period, and (b) the non-defaulting Companies shall be entitled to all of the energy from the 1975 and/or 1978 Units in proportion to their Ownership Shares. No such default shall affect any Company’s ownership interest, or any Company’s obligations under Paragraphs 6 and 7.

Paragraph 9.

Operation and Maintenance .  The Companies shall establish an Operating Committee for the purpose of establishing general policies for the operation and maintenance of the Columbia Plant and 345 KV Substation.  All of the Companies shall be represented on the Operating Committee and the voting power of the representatives of each Company shall be in proportion to the Ownership Share of such Company of the Columbia Plant as set forth in Paragraph 1(b).  The vote of the representatives of Companies having Ownership Shares aggregating more than 50% shall be controlling on any question to be determined by the Operating Committee.  The Operating Committee shall meet at the call of any member.

From the date of commercial operation of the 1975 unit until the date of commercial operation of the 1978 unit capacity, energy and operation and maintenance expenses of the 1975 Unit and 345 KV Substation shall be shared by the Companies in proportion to their respective Ownership Shares specified in Paragraphs 1(a) and 1(d) above.  Beginning on the date of commercial operation of the 1978 Unit and continuing thereafter, the capacity, energy and operation and maintenance expenses of the Columbia Plant and 345 KV Substation shall be shared by the Co