Oct. 29, 2009 (PR Newswire) --
MILWAUKEE, Oct. 29 /PRNewswire-FirstCall/ -- Wisconsin Energy Corporation (NYSE: WEC) announced today that it has reached a definitive agreement to sell Edison Sault Electric Company, one of its regulated utility subsidiaries, 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 purchase price represents a premium of approximately $2 million as compared to 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."
Klappa added that Edison Sault has not requested a base rate increase in almost 25 years. "Without this transaction, Edison Sault would have needed to request higher retail rates in the not too distant future. The combination of the two utility operations should allow these increases to be mitigated," Klappa said.
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.
Wisconsin Energy Corporation (NYSE: WEC), based in Milwaukee, is one of the nation's premier energy companies, serving more than 1.1 million electric customers in Wisconsin and Michigan's Upper Peninsula and more than 1 million natural gas customers in Wisconsin. The company's principal utilities are We Energies and Edison Sault Electric. The company's other major subsidiary, We Power, designs, builds and owns electric generating plants.
