Wisconsin Energy to sell U.P. subsidiary
Wisconsin Energy Corp. has reached a definitive agreement to sell Edison Sault Electric Company, one of its regulated utility subsidiaries in Michigan’s Upper Peninsula, to Cloverland Electric Cooperative of Dafter, Mich., for $61.5 million.
Under the agreement, the ownership share in American Transmission Company (ATC) currently held by Edison Sault will be retained by Wisconsin Energy, the Milwaukee-based parent company of We Energies.
The purchase price represents a premium of approximately $2 million as compared with the net book value of Edison Sault’s assets, excluding the ATC ownership share.
"This agreement is a positive step forward for customers of Edison Sault as well as our stockholders," said Gale Klappa, president and chief executive officer of Wisconsin Energy. "The service areas of Cloverland and Edison Sault are contiguous. Both organizations know each other well and work together on a daily basis. As a result, they’ll be able to gain efficiencies that will benefit customers across this region of northern Michigan."
To assure a continuing, reliable source of energy for Edison Sault’s customers, the existing wholesale power arrangement between Wisconsin Electric and Edison Sault will be extended by another 12 years to 2030.
Edison Sault has 59 employees and serves more than 22,000 customers in the eastern U.P.
Proceeds from the sale will be used to help fund the construction of new facilities and to reduce Wisconsin Energy’s debt.
The sale is subject to approval by Cloverland’s membership and is subject to normal regulatory approvals, including reviews by the Michigan Public Service Commission, the Federal Energy Regulatory Commission and the Rural Utility Service, as well as customary closing conditions. Assuming timely approvals, the transaction could be completed by mid-year 2010.