We have been impressed with the performance of Gale Klappa and his Southern Company (SO) colleagues’ (Fred Kuester and Allen Leverett) since they took over the executive leadership of Wisconsin Energy (WEC) from Richard Abdoo and his team. We are so impressed we even published our research report comparing Southern and Wisconsin Energy back in June. Our thesis was that as good as the Southern Company was; Wisconsin Energy was better. This is important to investors who desire dividends because for years Southern Company was held up as the utility company every investment must own for dividend yield and dividend growth. We had first purchased shares of Wisconsin Energy in 1997 not long after its disaster-piece attempt to merge with Northern States Power. We first purchased it directly from the old Bank of Boston before it merged with Fleet Financial Group and sold off its direct stock purchase and dividend reinvestment plan transfer agency business to First Chicago.

Wisconsin Energy was a mediocre performer during our first six years of ownership but began its rapid ascent in 2003 with the hire of Gale Klappa, Fred Kuester and Allen Leverett from Southern Company. In our opinion the hire of Klappa was an absolutely serendipitous selection because not only did he come from the most respected utility in the world; he was a Milwaukee guy (UW-Milwaukee Class of 1972). What made Klappa’s hire a grand slam is that he brought Kuester and Leverett with him! J. Kevin Fletcher was the fourth Southern alumnus to join Wisconsin Energy. Fletcher joined WEC in October 2011 and serves as a Senior Vice President of Wisconsin Electric and Wisconsin Gas. Fletcher previously was a Vice President for Georgia Power, which is Southern’s largest operating subsidiary.

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