Upper Peninsula Power Company
A WPS Resources company
NEWS RELEASE

Houghton MI– Upper Peninsula Power Company, a subsidiary of WPS Resources Corporation (NYSE: WPS), announced that it is considering optional uses for more than 15,000 acres of land as part of WPS Resources’ asset management strategy.

“We hold several thousand acres of land in the Upper Peninsula that are not necessarily needed for current operations,” explained WPS Resources Chairman Larry Weyers. “In 2002, UPPCO will go through a process to determine the optimal use and ownership of the land.”

UPPCO Vice President Gary Erickson said, “We’re just in the beginning stages of the process. We intend to work with local and state agencies to determine their interest in the properties, if any. We’ll also consult with area residents and other interested parties before we make any decisions on the direction we will take.”

Erickson said some of the land, located primarily in Ontonagon, Delta, and Marquette counties, could be sold to agencies that would keep it in its relatively undeveloped state or that some parcels could be sold to private interests, depending on what is best for the Upper Peninsula, area residents, and the company.

“We’ve held this land for some time,” he said, “but UPPCO isn’t a land management company. It’s probably more appropriate for other owners to assume that responsibility.

“Some of the property is land associated with hydroelectric projects in the Upper Peninsula,” he added, “but it isn’t needed for the safe and reliable operation of the facilities there.”

In 2001, Wisconsin Public Service, another utility subsidiary of WPS Resources, agreed to transfer ownership of more than 9,000 acres to the Wisconsin Department of Natural Resources. Public Service is still reviewing its ownership of other lands in Wisconsin.

Upper Peninsula Power Company
A WPS Resources company
NEWS RELEASE

Houghton, MI – Upper Peninsula Power Company, a subsidiary of WPS Resources Corporation (NYSE: WPS), will withdraw its request for a 7.6% overall increase in retail base electric rates.

UPPCO requested the rate increase in February 2005 to recover costs associated with improving service quality and reliability and managing rising employee and retiree benefit costs. Had it been approved, the average residential customer in UPPCO's Integrated System (using 500 kilowatt-hours of electricity per month) would have seen a monthly increase of approximately $6.28. The monthly increase for the average residential customer in UPPCO’s Iron River System (using 500 kilowatt-hours a month) would have been approximately $4.61. Increases for business customers would have varied, depending upon their rate classifications.

After filing the February 2005 rate increase request, UPPCO offered to withdraw the case if the Michigan Public Service Commission (MPSC) would grant requested regulatory treatment of the gains expected to result from the proposed sale of certain UPPCO lands. Last Thursday, April 28, the MPSC approved the requested regulatory treatment by sharing the benefits of the land sales between customers and shareholders, and UPPCO agreed to withdraw the rate increase request.

As part of the settlement, UPPCO also agreed not to file for any retail base electric rate increases before January 1, 2006. UPPCO’s Power Supply Cost Recovery Clause is not subject to the filing moratorium.

“We’re pleased the MPSC has approved this option,” said Gary Erickson, UPPCO President. “We don’t take rate increases lightly. This provides an outcome that will be a win-win for our customers and our shareholders. The action will likely encourage economic development in the Upper Peninsula while preserving the recreational nature of the retained lands.”

The land UPPCO is proposing to sell includes approximately 7,300 acres of undeveloped and partially developed land adjacent to its AuTrain, Bergland, Bond Falls, Cataract, Prickett, and Victoria hydroelectric facilities, which the Federal Energy Regulatory Commission (FERC) determined years ago is unnecessary for hydroelectric operations. UPPCO will continue to own and operate the dams and lands required by FERC to be retained for hydro operations. In December 2004, UPPCO filed with the MPSC indicating it was exploring the sale of these lands to governmental agencies, conservation groups, and private investors.

1/5/2006
New Citizens Group Condemns Land Sale Procedure, Praises BFIT Letter
The Upper Peninsula Public Access Coalition (UPPAC), a newly formed citizens group concerned with the sale of land owned by Upper Peninsula Power Company/Wisconsin Public Service Corporation (UPPCo/WPS), today praised letters filed by the US Forest Service and by the MI DNR. These letters, filed with the Federal Energy Regulatory Commission, focus on numerous inconsistencies between the UPPCo land sale and the FERC licenses, states concerns of the sale and proposed development, and requests that FERC hold UPPCo to the standards of the FERC license during the land sale. These letters are expected to be the first of several filed by members of the Bond Falls Implementation Team, a coalition of nonprofit organizations and public agencies that were affiliated with FERC during the development of the recently issued license for project 1864, Bond and Victoria Flowages. Letters are also anticipated on behalf of the Keweenaw Bay Indian Community and the Michigan Hydro Relicensing Coalition, among others.

"We are very pleased to see this action by the public agencies and affected NGOs, as they coincide with the requests of our group," stated Nancy Warren of Ewen, MI, spokesperson for UPPAC. She went on to say that the interest in this issue by the public in the region has increased greatly in the past several days.

 January 11, 2006
UPPAC Questions UPPCo¹s Claims
The Upper Peninsula Public Access Coalition (UPPAC), a group of citizens living in and recreating in the UP, continues to respond to developments in the sale of land holdings by the Upper Peninsula Power Company and parent company Wisconsin Public Service Corporation. This transaction, taking place with Naterra Land Company of Minnesota, involves a reported total of 7,300 acres surrounding the flowages of Bond Falls and Victoria on the Ontonagon River, Boney Falls and Cataract on the Escanaba, Prickett on the Sturgeon, and AuTrain on the AuTrain River. It has been announced in a recently released WPS press release that a portion of this sale has already taken place, with the closing on December 29, 2005 of lands on the north and west shores of Bond Falls and on Cataract and Boney Falls.

UPPCo Changes Tone
In a press release issued January 11, 2006, UPPCo and WPS expressed that they are "meeting with agencies to discuss options" and that they are concerned with acting in a matter consistent with the FERC license. UPPAC, in response, stated that the recent conciliatory tone falls short of FERC requirements, and demanded that a new environmental impact statement, including the development prospect, be issued prior to any development activity.

"Since none of this development was known or revealed in the 2003 license, we demand a FERC sponsored public comment period and an environmental impact statement, not a charade that takes place outside of FERC guidelines", stated Joe Hovel of Conover, Wisconsin, an UPPAC spokesperson.

Until this point, WPS has not been forthcoming with their plans to the public, and it was not until citizens responded in protest to the development that WPS suggested a comment period. Letters filed with FERC by the US Forest Service, Michigan DNR, the US Fish and Wildlife Service, and the Michigan Hydro Relicensing Commission also expressed numerous concerns with the development proposal, and requested that WPS adhere to the FERC license.

UPPCo¹s Commitment to the MPSC
WPS/UPPCo met with the Michigan Public Service Commission (MPSC), in March of 2005 asking that regulatory treatment be granted on the expected gains from the land sale. Signed on April 28, 2005, the final settlement agreement reads that "UPPCo further represents that it is exploring the sale of lands with both public agencies and private investors. UPPCo states that the sale of lands to a public agency will enhance the preservation of existing pristine lands and/or create additional recreational areas." According to an interview with US Forest Service land agent Chuck Frank, the Forest Service did express strong interest in purchasing more than 800 acres of UPPCo land, primarily at the Bond Falls site, in April of 2005. Frank stated that the Forest Service came to WPS with a proposal to purchase the lands and insure access for existing snowmobile trails and other public values. WPS Corporation reportedly countered this offer with a suggestion of land exchange with the Forest Service, which, according to Frank, was not in the best interest of the public.
In a similar attempt to negotiate with WPS, Jeff Knoop from the Nature Conservancy in Marquette, MI acknowledged receiving a call from UPPCo regarding a land sale. At the time, he asked for information and maps of the proposed project. He stated that he received no further information from UPPCo, and later learned that any attempt to conserve these lands were "too late".

Dave Anderson of FlintSteel Restoration in Wakefield, MI attempted to work on a land agreement that would protect two UPPCo-owned parcels. These tracts, referred to as Victoria Norwich and Victoria Minnesota, include over two miles of frontage on the Ontonagon River, near to UPPCo¹s other holdings at the Victoria Reservoir. Anderson said that WPS Corporation showed no interest in discussing a conservation easement to protect the riparian ecosystem and the clay bank topography at these sites.

UPPCo Contradicts Existing EIS
WPS revealed that plans had been created in 2002 for the sale of these lands as part of a strategy for long term asset management. Between the years of 2000 and 2003, the recently implemented FERC license for project 1864, covering Bond Falls and Victoria Flowages, was developed with extensive review and public comment. There was no mention or indication at this time of any potential sale or development on these lands. To the contrary, a quote on page 173 of the FERC Final Environmental Impact Statement (FEIS) for Project 1864, adopted in June of 2002, states that "because UPPCo does not propose significant development near the reservoirs, the continued operation of the reservoirs would not affect the gray wolf." Development in the magnitude as proposed by Naterra appears to go beyond the practices prescribed by the FEIS, and was not revealed in the process of developing the FEIS.

February 21, 2006
Citizens Stiffen Demands Over Large-Scale Development Proposal in Michigan's Upper Peninsula

A citizens group known as the Northwood Alliance, Incorporated, has recently come to the assistance of the Upper Peninsula Public Access Coalition ("UPPAC") in its fight against the proposed residential development of thousands of acres around several wild flowages in the Upper Peninsula of Michigan. The lands are owned by the Upper Peninsula Power Company ("UPPCO"). Legal counsel for the Northwood Alliance has filed letters with the Federal Energy Regulatory Commission ("FERC") threatening a lawsuit in reaction to the proposed development, on the grounds that activities related to the development would violate the FERC licenses that require that the lands surrounding the flowages remain open to public access and be managed for ecological values and water quality.

The issue is complicated by the fact that UPPCO lands are classified in different ways: either as "project lands" directly adjacent to the flowages, or as "non-project" lands that are outside the "project" area. UPPCO "project lands" are subject to license agreements with FERC and are legally bound to be public access, and to be managed for endangered and threatened species and water quality. However, UPPCO has sold or proposed to sell about 7300 acres of their "non-project" lands (lands not under FERC jurisdiction) to an out of state developer, and are seeking to convey the rights to lot owners to make improvements (such as docks, stairways, roads, view corridors, and footpaths) on the "project lands" to favor lot owners over the public.

The National Environmental Policy Act ("NEPA") requires federal agencies to prepare environmental impact statements for major proposals that may impact the environment, and to supplement those statements when substantial changes are made to the projects. When FERC prepared the required environmental studies for these hydro projects, UPPCO claimed that it had no intention of selling or developing these lands. The impact of residential development on these lands was therefore not investigated by the licensing process. Now that UPPCO seeks to sell the land to a developer, FERC regulations require that the impact of that land use be examined in a supplemental environmental impact statement. UPPCO has thus far shown no signs of complying with that requirement.

"The value of these large tracts of undeveloped lands for recreation, sustainable forestry, and wildlife would be severely compromised if fragmented as proposed," said Joe Hovel, for the Northwood Alliance, Inc. "And, the public should not tolerate a power company and a developer reaping big profits by developing lands that are intended to be managed for the public good, under a contract with FERC and the American public".

The letters sent by the Northwood Alliance demand that FERC study the potential impacts of the newly proposed development and related activities as required by the FERC hydro project handbook and the NEPA, and consult with the United States Fish and Wildlife Service over the potential impacts of these activities on endangered lynx and timber wolves, as required by the Endangered Species Act. "UPPCO¹s new plans have caught everyone by surprise, including the agencies," states Marc Fink, an attorney in Duluth representing the citizens. "We are asking FERC to look before they leap by assessing the impacts of these major changes before the point of no return."