By Chris O’Malley
Michigan regulators on Thursday approved Wisconsin Energy Corp.’s $9.1 billion acquisition of Illinois-based Integrys Energy — with the condition that the merged companies continue to operate the Presque Isle Power Plant in Michigan’s Upper Peninsula.
The approval of the Michigan Public Service Commission comes less than a month after the Federal Energy Regulatory Commission granted its OK (EC14-126).
The deal also requires the approval of state regulators in Illinois, Minnesota and Wisconsin.
Gov. Rick Snyder and other Michigan officials initially opposed the merger, in part because Wisconsin Energy had agreed to keep Presque Isle open under a system support resource agreement with MISO.
The aging generating plant had lost its major mine customers, and keeping it open under an SSR would have resulted in hefty rate increases for Upper Peninsula customers. Presque Isle recently wooed back former mine customers.
In exchange for approving the merger, the Michigan Public Service Commission won a commitment from Wisconsin Energy not to enter into a Presque Isle SSR with MISO before the end of 2019 or a new “clean energy” plant goes into service in the Upper Peninsula.
Wisconsin Energy also agreed to continue making any capital investments needed to continue operations of Presque Isle until the end of 2019 or the new plant begins commercial operations. The plant could retire earlier if Wisconsin Energy’s WEPCo subsidiary and the mines served by Presque Isle come to an agreement.
Other terms include a pledge by Wisconsin Electric not to increase retail rates for Michigan customers as a result of special contracts between Wisconsin Electric and mines in the area.
It appears the biggest hurdle for Wisconsin Energy and Integrys to clear is in Wisconsin, where consumer groups have demanded that the Milwaukee-based utility provide guarantees of monetary savings from the merger.
Among those groups insisting on concessions are the Wisconsin Paper Council, Wisconsin Industrial Energy Group and retail customer group Citizens Utility Board, reports the Milwaukee Journal Sentinel.
Wisconsin Energy is the parent of electric utility We Energies. Integrys owns Wisconsin Public Service Corp. and Michigan Gas Utilities Corp