Donald C. Wilson
ESELCO, Inc.
(906) 632-5158

Tuesday, May 6, the 9th Annual Meeting of ESELCO, Inc., took place at the Walker Cisler Center, on the campus of Lake Superior State University, Sault Ste. Marie, Michigan.

Chairman Thomas S. Nurnberger informed shareholders that this annual meeting would probably be the last annual meeting of shareholders of ESELCO, Inc., as the management of ESELCO, Inc. (Nasdaq/EDSE) and Wisconsin Energy Corporation (NYSE/WEC) are continuing in their efforts to reach a Reorganization Agreement, whereby ESELCO, Inc., would merge with Wisconsin Electric Power Company.

Chairman Nurnberger took the opportunity to reflect on the major contributions of former chairman of Edison Sault Electric Company, Harold "Duke" Polian. Mr. Polian served on the Board of Directors of Edison Sault Electric Company from 1947 to 1955, and acted as Chairman of the Board from 1955 to 1977. Mr. Nurnberger related that between 1947 and June of 1988, Mr. Polian was involved in every major decision in the company, including the purchase of the hydro plant from Union Carbide Corporation in 1963.

Chairman Nurnberger also commented that with changes in the regulatory climate on the horizon, options such as customer choice of power suppliers will make it difficult for small companies to survive. He informed shareholders that after careful consideration, the Board of Directors decided that while the company was doing well, now would be the right time to join forces with a strong partner.

Mr. Nurnberger summarized his remarks by reporting that 1996 was a very good and exciting year for the company. Earnings continued to grow, rehabilitation of the power canal continued, the EPA case was settled, and merger talks got underway. In closing, he thanked the shareholders for their strong support of the Board of Directors and management over the years he has been associated with the company.

Following his comments, Chairman Nurnberger introduced to shareholders, Richard Abdoo, Chairman and Chief Executive Officer of Wisconsin Energy Corporation, who was present for the meeting.

As William R. Gregory was celebrating his 25th Anniversary as President of the Company, he said that he asked for two things when he was appointed President at the tender age of 32. He asked for the gift of wisdom and courage - wisdom to know what is right and the courage to do it. These gifts, combined with honesty, integrity, and trust are the cornerstone of executive leadership in American business.

In his remarks, Gregory paid specific tribute to Chairman Nurnberger, who came on the Board in 1977 and became Chairman in 1980. Under his leadership, the company's financial record has been the envy of the utility industry. Gregory said, "Tom Nurnberger represents all of the best in American business and in human character. His reputation, character, and business knowledge stimulated the board to foster the interests of our shareholders, while at the same time he helped our management team to be successful."

Gregory went on to indicate there are many areas in which management could be proud. Several are cited here. Base customer rates have not increased since 1982. There have been no employee fatalities under his watch, which began as President in 1972. The employees of the company and its retirees own approximately 30% of the outstanding common stock, either directly, in their pension plans, or their savings plans. This is the highest percentage in the electric utility industry of employee ownership.

Executive Vice President and Chief Operating Officer Donald Sawruk informed shareholders that the impending competitive environment in the electric utility industry will force many changes. To meet the competitive market challenges, the company will focus it strengths on four key areas: shareholders, customers, employees, and the community.

Mr. Sawruk stated that customers of Edison Sault should continue to enjoy low cost reliable service. He asserted that the company will continue to implement cost control measures that began in the early 1970's. He explained that he does not foresee any cost increases for customers, nor significant changes in the number of field employees.

Mr. Sawruk went on to reiterate that Edison Sault Electric Company shareholders have enjoyed financial success and that the successful merger with Wisconsin Energy should allow shareholders to continue to enjoy similar financial success.

Mr. Sawruk affirmed the company's continuing support for the communities that it serves. The company, as is in the past, will continue its focus on supporting an economic environment which promotes all aspects of the community.

In other action, the Board of Directors announced a $.28 cash dividend will be paid on August 15, 1997, to shareholders of record on August 1, 1997.

During the Annual Meeting, shareholders reelected James S. Clinton, and William R. Gregory for a three-year term. In addition, shareholders also approved a proposal to amend the Restated Articles of Incorporation to increase the number of authorized common shares from 3,000,000 to 9,840,000.

The Board of Directors reelected the following slate of Officers:

James L. Beedy, David H. Jirikovic, and Paul A. Schemanski, were reelected as Vice President - Engineering, Assistant Vice President - Operations, and Assistant Vice President - Information Systems, respectively, for Edison Sault Electric Company.

The Board of Directors announced the promotion of Ernest H. Maas to Vice President - Operations for Edison Sault Electric Company. Mr. Maas previously was appointed to the position of Assistant Vice President - Engineering in 1996.

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Last modified: August 16, 2002