By Gale Klappa
Chairman of the Board and Chief Executive Officer
This summer, the country’s newest Fortune 500 company will likely NOT be headquartered in New York, Chicago, Minneapolis, or even Omaha. This once-in-a-generation opportunity will be achieved right here in Wisconsin. The new enterprise will be called WEC Energy Group, and it will be established after approval of Wisconsin Energy’s acquisition of Integrys.
Of course, the motivation for states across the nation to land Fortune 500 company headquarters goes far beyond pride. Real economic benefits flow to cities and states that serve as the home base for these headquarters.
So the arrival of a new Fortune 500 company is certainly good news, but it’s only the beginning of the benefits the state of Wisconsin will realize over the next decade.
The new company will include We Energies and Wisconsin Public Service. And it’s clear that Wisconsin customers have the highest potential for cost savings from this transaction.
Given the geographic proximity and business similarities of the two Wisconsin utilities, customers could see as much as $1 billion of savings over the next 10 years through a combination of lower capital and operating costs.
The specific areas for potential savings have been identified by the state’s public service commission staff, a national energy expert and the company. Let’s take a closer look.
Public Service Commission staff indicated the combined company could realize savings “upwards of $600 million” in long-term resource planning alone based solely on the larger power plant portfolio of the combined company.
John Reed, a nationally recognized expert with decades of experience in transactions such as this one, has estimated that – over the long-term – the operational savings of the combined company would total as much as $130 million annually.
Beyond those impressive statistics, there will be other opportunities to realize efficiencies for customers. For example, within the next 10 years as the electric grid becomes smarter, customers have more personal billing options and the need grows for more robust systems to protect customer information, it’s highly likely both We Energies and Wisconsin Public Service will need to invest in new automation and customer systems. The estimated cost would be approximately $150 million for each company. By purchasing just one set of systems to serve both utilities, customers could save $150 million of capital costs.
The combination of Wisconsin Energy and Integrys was carefully crafted to create a strong electric and natural gas delivery company with deep operational expertise, scale and the financial resources to meet the region’s future energy needs.
We’re committed to reliability, customer satisfaction, environmental stewardship – and, yes, to the delivery of cost savings and competitive pricing over the long run.
We will continue investing in the energy infrastructure so critical to job creation and growth of the Wisconsin economy… so when the future gets here, it will be a bright one.