Divestiture reduces Integrys Energy Group's collateral requirements by $300 million

CHICAGO, July 17 /PRNewswire-FirstCall/ -- Integrys Energy Group, Inc. (NYSE: TEG) today announced that Integrys Energy Services of Canada Corp., a subsidiary of its nonregulated subsidiary, Integrys Energy Services, Inc., has signed an agreement to sell nearly all of its Canadian natural gas and electric power contract portfolio to Shell Energy North America (Canada) Inc., a subsidiary of Shell Energy North America (US). The transaction, which requires certain contractual consents and necessary regulatory approvals, is expected to close in the third quarter of 2009.

Upon close, the transaction will result in an incremental reduction of Integrys Energy Group's collateral requirements by an estimated $300 million.

"This sale is one step on the way to our objective of reducing the collateral requirements and capital investment for Integrys Energy Services," said Charles A. Schrock, President and Chief Executive Officer of Integrys Energy Group. "We are pleased to have reached an agreement with Shell Energy North America at a value that is in keeping with our recovered capital expectations for the full nonregulated segment divestiture. This deal, as part of our structured capital redeployment process, will reduce our collateral requirements, strengthening our balance sheet to support the growth of our core regulated utilities business."

The portion of the Canadian wholesale natural gas operation excluded from this transaction is a 2 Bcf natural gas storage contract, which Integrys plans to divest in a separate transaction.

J.P. Morgan Securities acted as exclusive financial advisor to Integrys Energy Group and Thorndike Landing acted as lead advisor to Integrys Energy Services for this transaction.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. You can identify these statements by the fact that they do not relate strictly to historical or current facts and often include words such as "anticipate," "expect," "intend," and other similar words. Forward-looking statements are beyond the ability of Integrys Energy Group to control and, in many cases, Integrys Energy Group cannot predict what factors would cause actual results to differ materially from those indicated by forward-looking statements. Please see Integrys Energy Group's periodic reports filed with the Securities and Exchange Commission (including its 10-K and 10-Qs) for a listing of certain factors that could cause actual

results to differ materially from those contained in forward-looking statements.

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