Local utilities may feel impact of energy merger


July 19, 2015

The purchase of Integrys Energy Group by Wisconsin Energy Corp. could have a significant impact on smaller utility companies owned by municipalities like those in Hartford and Slinger — more than is obvious at first blush.

The state Public Service Commission on May 20 approved of the acquisition. Integrys is the parent company of Wisconsin Public Service Corp. of Green Bay. The $9.1 billion deal was previously approved by federal and Michigan regulators and shareholders of each company.

Besides the possible impact on electricity rates paid by consumers, Hartford City Administrator Gary Koppelberger thinks the small utilities could also be impacted in other, not so obvious, ways.

'The merger is also expected to result in the relocation of electric line workers from Wisconsin to other Midwestern states where demand and wages are higher,' Koppelberger said. 'Assuming this is true, the Wisconsin market for electric line workers will tighten, resulting in upward pressure on labor costs.'

Koppelberger said although Hartford Electric pays its line workers at the high end of municipal electric utilities in Wisconsin, investor-owned utilities offer higher wages with competitive benefits and entitlements.

Slinger Village President Russ Brandt said the village's electric utility is small so it has difficulty in hiring line workers.

'We have a long-term electric power purchase agreement with WPPI Energy so our costs can't fluctuate much,' Brandt said. 'We have a joint agreement with the Hartford Utility for help from them on projects. Our utility is so small that we only have two line workers, when we should have three or four. When one is on vacation or ill we need help from Department of Public Works employees or from Hartford's utility.'

Integrys, WE Energies and local municipal utilities are also part owners of American Transmission Co. which owns and operates many of the region's electric transmission lines. Concerns were raised because much of the company is owned by the two companies and its subsidiaries. Wisconsin Ene-rgy’s subsidiaries own about 26 percent of ATC, and Integrys owns about 34 percent.

As part of the merger, the companies agreed to vote under the Integrys 34 percent ownership on issues pertaining to ATC to ensure the merger does not increase the companies’ ability to use ownership or control of transmission facilities to give them a competitive advantage.

Reach reporter Joe VanDeLaarschot at