WPS Resources and Peoples Energy File with ICC to Combine Companies, Request Expedited Review
02 Agosto 2006 - 7:48PM
PR Newswire (US)
ICC is one approval in process to combine two historic companies
GREEN BAY, Wis., and CHICAGO, Aug. 2 /PRNewswire-FirstCall/ -- WPS
Resources Corporation (NYSE:WPS) and Peoples Energy Corporation
(NYSE:PGL) today filed an application with the Illinois Commerce
Commission (ICC) to combine the two companies. Both companies are
seeking expedited approval of the application by January 1, 2007.
This is one of several regulatory approvals necessary to complete
the merger of the companies. The combined company joins WPS
Resources, which was named Fortune's "Most Admired Company" in the
energy industry and Forbes' "Best Managed Utility Company in
America" earlier this year, and Peoples Energy, which has a 150-
year tradition of safe and reliable customer service. "The overall
result of the combination of WPS Resources and Peoples Energy will
be larger, stronger, and more diversified regulated operations in
the Midwest. In a consolidating industry, in which size, scale and
diversity of the customer base matter, we are convinced that both
companies have found the best possible partner, and that both
companies' customers will benefit from the merger in ways that
would not be possible but for the merger," said Larry Weyers,
Chairman, President and CEO of WPS Resources, who will serve as
President and CEO of the combined company. Peoples Gas and North
Shore Gas, subsidiaries of Peoples Energy, had been planning to
file a request for delivery rate increases and will still need such
increases as neither company has filed for new rates in more than
10 years. However, those plans are now being postponed so that WPS
Resources and Peoples Energy can focus on gaining approvals for the
combination. This will result in no delivery rate increases to
customers of those two utilities in 2007. The ICC application
indicates that Peoples Gas and North Shore Gas will seek a base
delivery rate increase in 2007, to take effect in 2008. In
addition, they will make no further requests until 2009, which, if
approved, would take effect in 2010. From a customer perspective,
the cost savings identified from the combination of the companies
are expected to limit delivery rate increases after 2008 for
Peoples Gas and North Shore Gas from what otherwise may have been
necessary without the merger. The merger will create a combined and
newly named energy holding company headquartered in Chicago, with
nearly 1,700,000 natural gas utility customers throughout the
Midwest, almost 500,000 electric utility customers in Wisconsin and
Michigan, and non-regulated energy operations in many parts of the
United States and Canada. The combination of the companies will
enable the realization of substantial benefits for all of its
customers, employees, and shareholders in the form of economies,
efficiencies, and operating effectiveness across the corporate,
shared services, and regulated operating areas. These synergies
relate to a variety of operational functions and will result in
benefits that will accrue to utility customers now and in the
future. "The skills that WPS Resources will bring to the
combination -- including customer service focus, strong community
involvement, and a commitment to a disciplined approach to managing
the business and processes -- are skills that can be applied
universally," said Weyers. "The gas companies' personnel know how
to operate and maintain an established urban system and their
customer service personnel are familiar with the issues facing
their particular customer bases. We anticipate that the knowledge
of these employees, and the management skills that WPS Resources
brings to the merger, will combine to yield a higher level of
customer service and operational efficiency and effectiveness." The
combination is conditioned upon approval by the shareholders of
both companies, expiration or early termination of the applicable
Hart-Scott-Rodino waiting period, and the approval of various state
and federal regulatory authorities, including the Federal Energy
Regulatory Commission and the Illinois Commerce Commission. WPS
Resources will also seek Public Service Commission of Wisconsin
approval of an amendment to its affiliated interest agreement. The
merger agreement contains other customary closing conditions. About
WPS Resources Corporation WPS Resources (NYSE:WPS), based in Green
Bay, Wisconsin, is a holding company with five major subsidiaries
providing electric and natural gas energy and related services in
both regulated and non-regulated energy markets. Its largest
subsidiary is Wisconsin Public Service Corporation, a regulated
electric and natural gas utility serving northeastern Wisconsin and
a portion of Michigan's Upper Peninsula. Wisconsin Public Service
serves more than 425,000 electric customers and 308,000 natural gas
customers. Another subsidiary, Upper Peninsula Power Company, is a
regulated electric utility that serves approximately 52,000
electric customers in Michigan's Upper Peninsula. Michigan Gas
Utilities Corporation is a regulated natural gas utility serving
161,000 customers in lower Michigan. Minnesota Energy Services
Corporation is a regulated natural gas utility serving more than
200,000 customers throughout Minnesota. WPS Resources' major
non-regulated subsidiary consists of WPS Energy Services, Inc., a
diversified non-regulated energy supply and services company
serving commercial, industrial and wholesale customers and
aggregated groups of residential customers. Its principal market is
the northeast quadrant of the United States and adjacent portions
of Canada. Its principal operations are in Illinois, Maine,
Michigan, Ohio, Texas, Virginia, and Wisconsin in the United States
and Alberta, Ontario, and Quebec in Canada. WPS Energy Services
also owns and/or operates non-regulated electric generation
facilities in Wisconsin, Maine, Pennsylvania, New York, and New
Brunswick, Canada; steam production facilities in Arkansas and
Oregon; and a partial interest in a synthetic fuel processing
facility in Kentucky. Visit the WPS Resources Web site at
http://www.wpsr.com/ for additional information. About Peoples
Energy Peoples Energy, (NYSE:PGL) a member of the S&P 500, is a
diversified energy company consisting of four primary business
segments: Gas Distribution, Oil and Gas Production, Energy Assets
and Energy Marketing. Peoples Gas and North Shore Gas, regulated
utilities, deliver natural gas to about one million customers in
the City of Chicago and 54 communities in northeastern Illinois.
The company's non-utility businesses include Peoples Energy
Services (PESC) and Peoples Energy Production (PEP). PESC, launched
in 1996, serves more than 25,000 customers. PESC provides a
portfolio of products to manage energy needs of business,
institutional and residential consumers in today's volatile and
complex energy market. The company recently won approval to offer
services in Michigan, Ohio and New York. PEP, founded in 1998, is
primarily focused on acquiring proven, onshore reserves with upside
potential in a limited number of strategic supply basins. Value is
then added through drilling programs, production enhancements and
reservoir optimization. The company's acquisition and drilling
efforts are primarily focused on natural gas. Visit our website at
http://www.peoplesenergy.com/ . Forward-Looking Statements This
press 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," "may," "could,"
"project," "believe" and other similar words. Forward-looking
statements are beyond the ability of WPS Resources and Peoples
Energy to control and, in many cases, neither WPS Resources nor
Peoples Energy can predict what factors would cause actual results
to differ materially from those indicated by forward-looking
statements. Please see WPS Resources' and Peoples Energy's periodic
reports filed with the Securities and Exchange Commission
(including their 10-Ks and 10-Qs) for listings of certain factors
that could cause actual results to differ materially from those
contained in forward-looking statements. All forward-looking
statements included in this press release are based upon
information presently available, and neither WPS Resources nor
Peoples Energy assumes any obligation to update any forward-
looking statements. Additional Information This communication is
not a solicitation of a proxy from any security holder of WPS
Resources Corporation or Peoples Energy Corporation. WPS Resources
Corporation intends to file a registration statement on Form S-4
with the Securities and Exchange Commission (the "SEC") in
connection with the proposed transaction. The registration
statement will include a joint proxy statement of WPS Resources
Corporation and Peoples Energy Corporation that also constitutes a
prospectus of WPS Resources Corporation, which will be sent to the
shareholders of WPS Resources Corporation and Peoples Energy
Corporation. Shareholders are urged to read the joint proxy
statement/prospectus and any other relevant document when they
become available, because they will contain important information
about WPS Resources Corporation, Peoples Energy Corporation and the
proposed transaction. A definitive proxy statement will be sent to
shareholders of WPS Resources Corporation and Peoples Energy
Corporation seeking approval of the proposed transaction. The joint
proxy statement/prospectus and other documents relating to the
proposed transaction (when they are available) can be obtained free
of charge from the SEC's website at http://www.sec.gov/. These
documents (when they are available) can also be obtained free of
charge from WPS Resources Corporation upon written request to WPS
Resources Corporation, Attention: Barth J. Wolf, Secretary and
Manager - Legal Services, P.O. Box 19001, Green Bay, Wisconsin
54307-9001, or by calling (920) 433-1727, or from Peoples Energy
Corporation, upon written request to Peoples Energy Corporation,
Attention: Secretary, 130 East Randolph Drive, 24th Floor, Chicago,
Illinois 60601, or by calling (312) 240-4366. Participants in the
Proposed Transaction WPS Resources Corporation, Peoples Energy
Corporation and certain of their respective directors and executive
officers may be deemed to be participants in the solicitation of
proxies from shareholders in connection with the proposed
transaction under the rules of the SEC. Information about the
directors and executive officers of WPS Resources Corporation may
be found in its 2005 Annual Report on Form 10-K filed with the SEC
on February 28, 2006 and definitive proxy statement relating to its
2006 Annual Meeting of Shareholders filed with the SEC on April 7,
2006. Information about the directors and executive officers of
Peoples Energy Corporation may be found in its Amendment No. 1 to
its 2005 Annual Report on Form 10-K filed with the SEC on December
14, 2005 and definitive proxy statement relating to its 2006 Annual
Meeting of Shareholders filed with the SEC on January 1, 2006.
These documents can be obtained free of charge from the sources
indicated above. Additional information regarding the interests of
these participants will also be included in the joint proxy
statement/prospectus regarding the proposed transaction when it
becomes available. Non-Solicitation This communication shall not
constitute an offer to sell or the solicitation of an offer to sell
or the solicitation of an offer to buy any securities, nor shall
there be any sale of securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such
jurisdiction. No offer of securities shall be made except by means
of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended. DATASOURCE: WPS Resources
Corporation CONTACT: For WPS Resources Corporation, James F. Schott
(Regulatory Affairs), +1-920-433-1350; or For Peoples Energy,
Douglas Ruschau (Investor Relations), Vice President, Finance and
Treasurer, +1-312-240-3818, or Rod Sierra (Media), Vice President,
Communications and Government Relations, +1-312-240-4567 Web site:
http://www.wpsr.com/ http://www.peoplesenergy.com/
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