Milwaukee-based Wisconsin Energy Corp. has formed an agreement with the governor and other stakeholders in Michigan to gain their approval of its plan to acquire Chicago-based Integrys Energy Group for $9.1 billion.
Wisconsin Energy, the parent company of WE Energies, would have created the largest energy provider in eastern Wisconsin and Michigan’s upper peninsula through the acquisition of Integrys, which is the parent company of Green Bay-based Wisconsin Public Service Corp. It would have served more than 4.3 million electric and natural gas customers in Wisconsin, Illinois, Michigan and Minnesota. It also would operate almost 71,000 miles of power lines and natural gas lines.
In an SEC filing Monday, Wisconsin Energy detailed the agreement with the Michigan governor, the Michigan attorney general, the staff of the Michigan Public Service Commission and the Tilden Mining Company and Iron Mining Partnership “to resolve all objections these parties raised at the Federal Energy Regulatory Commission and the MPSC” to the acquisition.
As part of the agreement, Wisconsin Energy plans to sell its subsidiary Wisconsin Electric’s Presque Isle Power Plant and its Michigan electric distribution assets to Green Bay-based Upper Peninsula Power Co. In return, the stakeholders will each file a letter of support for the merger with the FERC.
The move will create a standalone electric utility in the Upper Peninsula, allowing Michigan to plan for longer-term power generation options in that area of the state, said Allen Leverett, president of Wisconsin Energy, in an email to Presque Isle employees yesterday.
“There clearly is a need for a long-term electric reliability solution in the UP that is fair to customers in Michigan and Wisconsin,” Leverett said. “… one of the fundamental issues we have is that Michigan has chosen an electric market structure that is completely different from the structure in Wisconsin, yet we are trying to plan a single system to serve our customers in both states.
“There is a clear need for a solution with or without our purchase of Integrys Energy. However, our proposed purchase of Integrys accelerated conversations about a solution for the UP. Over the past several months, we have had intensive conversations with senior staff in the offices of Michigan Gov. Rick Snyder and Michigan Attorney General Bill Schuette; Cliffs Natural Resources Inc., the owner of the Empire and Tilden mines in the Upper Peninsula; and other parties.”
If approved by the Federal Energy Regulatory Commission, the Federal Communications Commission, the Wisconsin Public Service Commission, the Illinois Commerce Commission and the Minnesota Public Utilities Commission, as well as anti-trust regulators, the acquisition of Integrys could be approved by summer 2015.