The Michigan Public Service Commission (MPSC) has approved a settlement agreement, with additional conditions, that permits the creation of a new Michigan-only jurisdictional utility in the Upper Peninsula (U.P.), which will assume the customers of Wisconsin Electric Power Company and Wisconsin Public Service Corporation.

"The Commission order today approves a settlement agreement authorizing creation of a new gas and electric utility serving 40,000 customers in the Upper Peninsula," said MPSC Chairman Sally Talberg. "Customers in the U.P. previously served by the Wisconsin Electric Power Company and Wisconsin Public Service Corporation will be served by the newly-created Upper Michigan Energy Resources Corporation (UMERC). The Commission expects that the new utility and other parties in the case will comply with the governance, financial, regulation and organization structure outline in the Commission order."

The new utility will begin effective January 1, 2017 and have offices in Menominee and Iron Mountain.

The Commission is making its approval conditional on the additional commitments made by the joint applicants in their initial brief:

• UMERC will provide the MPSC staff with capital and operations plan annually, to be submitted on June 1, 2017 and every year on June 1 thereafter;

• The joint applicants (Wisconsin Electric Power Company (WEPCo); Wisconsin Public Service Corporation (WPS Corp), and UMERC) will ensure that the Commission staff has access to all of WEPCo’s books and records pertaining to the Presque Isle Power Plant (PIPP) at the point in time when the remaining book value and decommissioning costs of PIPP are reviewed by the MPSC prior to inclusion and ultimate recovery from Michigan ratepayers;

• The joint applicants shall not seek to change any of the terms of the power purchase agreements until Jan. 1, 2020; and

• The joint applicants shall neither seek nor support changes before the Federal Energy Regulatory Commission (FERC) that will shift any costs to UMERC customers that are currently shared between Wisconsin and Michigan.

WEPCo provides retail electric service to approximately 27,500 full service customers and approximately 50 choice customers in the Upper Peninsula (UP).

WPS Corp has approximately 9,000 full service electric customers, 5,300 gas customers, 16 electric choice customers, and 17 gas transportation customers in the Upper Peninsula.

WEPCo will transfer to UMERC all of WEPCo’s Michigan retail full service and choice customers (except for Tilden and Empire Iron Mining Partnership (collectively, the Mines)), and WPS Corp will transfer all of WPS Corp’s retail full requirements electric and gas customers, choice electric customers, and gas transportation customers to UMERC.

UMERC will begin operations on January 1, 2017, with approximately 36,500 full service electric customers, 5,300 gas customers, 66 electric choice customers, and 17 gas transportation customers. The proposed transaction involves no electric generation assets, and no wholesale customers.

Case No. U-18061

Tags:
Michigan   M&A  

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