The Milwaukee-based Wisconsin Energy Corporation, which operates the utility We Energies, has proposed acquiring Integrys, the parent company of Green-Bay based Wisconsin Public Service, in what would be a $9 billion deal.
We Energies said it would pay about $6 billion for Integrys, as well as $3 billion to assume the debt of the Chicago-based firm. We Energies CEO Gale Klappa would head the combined company, which would be headquartered in Milwaukee, while Integrys CEO Charlie Schrock would stay on at the company for a while and then retire. Other top Integrys executives may leave too.
Klappa didn’t mention any layoffs of lower-ranking employees, but did tell investors about eventually finding “efficiencies.”
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“Certainly over time as we share best practices across the seven utilities in the group, we’ll find some additional efficiencies,” said Klappa. “Those additional efficiencies will help us hold down the trajectory of rate increases.”
The potential for later rate increases concerns Kira Loehr, acting director of the Citizens Utility Board of Wisconsin. She especially wonders if Wisconsin Public Service customers will see their bills go up.
“The average residential rate for a We Energies customer sits at above $90 a month rate now; for Wisconsin Public Service Corporation residential customers, it’s about $77 (a month),” said Loehr. “One of the things we’re wondering is which direction are the rates for the new company going to go, if the company gets approved.”
Loehr said some of the utility consolidations over the last 15 years have not provided the customer benefits that were promised.
We Energies Vice President Rick White said the plan is to keep the two electric utilities, and their rate structures, separate.
We Energies also said the purchase will need approval from the four states where the combined firm would operate – Wisconsin, Minnesota, Illinois and Michigan. Three federal agencies would also have to approve the deal, which may take another year.
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