Exelon, a company primarily known for its generation fleet, continued its customer-buying spree last week when it announced an agreement to buy Integrys Energy Services for $60 million.
Integrys is a competitive retail electricity and natural gas company with nearly 1.2 million customers across 22 states and D.C.
Exelon will fold those customers in with its existing 2.5 million retail electricity and gas customers served by its Constellation subsidiary. Integrys has commercial and industrial customers across more than 100 utility service territories, primarily in the Northeast. Its residential customers are mostly in Illinois, Michigan and Ohio.
Why is Exelon getting into retail when other utilities such as Dominion are getting out?
“We continue to see growth opportunities in our competitive businesses and the value of matching load to generation, which was one of the primary reasons for our acquisition of Constellation in 2012,” Exelon spokesman Paul Adams said last week. “Integrys Energy Services is a well-run company with an attractive customer base in key markets.”
Chris Crane, Exelon’s president and CEO, also emphasized matching load to generation. “Integrys Energy Services’ geographic footprint is a perfect strategic fit for Constellation and will create opportunities to reach more customers and grow the business, particularly in regions where Exelon also owns significant generation assets,” he said.
The agreement is the latest divestment move by Chicago-based Integrys Energy Group. In June, it announced it would sell its regulated utility operations — Michigan Gas Utilities, Minnesota Energy Resources, North Shore Gas, Peoples Gas, Upper Peninsula Power Company and Wisconsin Public Service — to Milwaukee-based Wisconsin Energy for $9.1 billion.
Others have also decided to get out of the retail business. Dominion Resources announced in March it would sell its retail electric business to NRG Energy.
NRG is paying $165 million for Dominion’s 600,000 retail customers in Illinois, Maryland, New Jersey, Ohio, Connecticut, New York, Massachusetts and Texas. Exelon is paying $60 million for 1.2 million customers.
In April, the company announced plans to buy Pepco Holdings Inc., which will add nearly 2 million distribution customers to its regulated customer count while increasing its rate base to almost $26 billion from $19 billion.
In March, Exelon announced that it was buying Indianapolis-based ETC ProLiance Energy. ProLiance is a retail supplier of natural gas with about 2,500 commercial and industrial customers in eight states. The terms of that acquisition were not released at the time.
One of the prizes of buying a retail business like Integrys is that it will allow Exelon to compete for some of the valued municipal contracts its regulated utilities, such as Commonwealth Edison, have been losing to retail companies. This includes the contract for a large chunk of Chicago’s customers. In 2012, Exelon lost 700,000 residential customers in Chicago to a retail energy business — Integrys.