Integrys Energy Services Inc., a non-regulated subsidiary of Integrys Energy Group Inc. (TEG) announced the sale of nearly all of its wholesale electric marketing and trading business to Macquarie Cook Power, a subsidiary of Macquarie Group Limited. Earlier last week, Integrys Energy Services closed the sale of its Environmental Markets business to EDF Trading North America LLC.
These sales were in correlation to Integrys Energy Services’ strategy of downsizing its scope of its operations.
Wholesale Businesses Sale
Integrys’ sale transaction included various power transactions, products and trading positions, including physical forwards, financial transmission rights and derivatives. This portfolio of transactions had an annual average total gross volume in excess of 125 million megawatt-hours over the past three years. This marks the completion of divestiture of Integrys Energy Service’s wholesale businesses.
The transactions have no direct impact on Integrys Energy Services’ retail electric or natural gas marketing business. The sale is expected to reduce Integrys Group’s collateral support requirements of roughly $400 million.
Sale of Environmental Markets Business
The Environmental Markets business required immaterial collateral support and largely consisted of a portfolio of long-term Renewable Energy Certificate contracts with generators and wholesalers.
The sale excludes Energy Services’ renewable solar or landfill gas projects owned by Integrys or its subsidiaries, any Renewable Energy Certificates used to serve Energy Services’ retail customers.
Background
Macquarie Cook Power, which was rebranded Macquarie Energy LLC in February 2010, is a subsidiary of Macquarie Group Limited.
EDF Trading is a leader in the international wholesale energy markets. Its own portfolio of assets, combined with EDF Group businesses, give it the ability to source, supply, transport, store, blend and convert physical commodities across the wholesale energy markets.
Integrys Energy Group is a diversified holding company with regulated utility operations operating through six wholly owned subsidiaries – Wisconsin Public Service Corporation, The Peoples Gas Light and Coke Company, North Shore Gas Company, Upper Peninsula Power Company, Michigan Gas Utilities Corporation, and Minnesota Energy Resources Corporation.
The company conducts its non-regulated operations, serving competitive energy markets, through its wholly owned non-regulated subsidiary, Integrys Energy Services and also a 34% equity ownership interest in American Transmission Company LLC (an electric transmission company operating in Wisconsin, Michigan, Minnesota, and Illinois).
Read the full analyst report on “TEG”
Zacks Investment Research
