Wisconsin Energy Reaches Agreement To Sell Edison Sault Electric

Published: 29-Oct-2009

Wisconsin Energy has reached a definitive agreement to sell Edison Sault Electric, one of its regulated utility subsidiaries, to Cloverland Electric Cooperative of Dafter, Michigan, for $61.5m.

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 $2m as compared to the net book value of Edison Sault's assets, excluding the ATC ownership share.

Gale Klappa, president and CEO of Wisconsin Energy, said: "This agreement is a positive step forward for customers of Edison Sault as well as our stockholders. 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."

To assure a continuing 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. 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.