Wisconsin Public Service Corp. to Propose Electric Generation Spinoff

GREEN BAY, WI-Wisconsin Public Service Corp., a subsidiary of WPS Resources Corp., will soon make a proposal to transfer its wholly-owned electric generating assets to a separate nonregulated subsidiary. The company said the move will keep customer bills low and to help level the playing field in the energy industry.

Wisconsin Public Service Corp. expects to submit its proposal to the Public Service Commission of Wisconsin (PSCW) in August.

Customers will be protected because the proposal calls for long-term contracts back to the utility assuring customers of continuing service and service levels, and rate protection, according to Larry Weyers, Public Service Chairman and CEO. Other benefits of the proposal are that it will help to promote a competitive electric generation market by encouraging independent power producers to enter the market in Wisconsin. "There are some real benefits increased competition can bring to customers in the form of low rates and increased reliability," said Weyers.

Weyers said that it's time to begin changing the energy industry in Wisconsin. He noted the relatively low electricity rates paid by customers in the state are "a double-edged sword." The PSCW has done a good job, he said, of regulating the utilities to ensure low rates. However, since rates are low there has been no rush to prepare the state's energy companies for competition from out-of-state companies.

Noting that the energy industry across the nation is on its way to becoming dominated by a few large companies, Weyers said that state energy companies should welcome the proposal. "In moving toward a competitive environment, other states have forced their utilities to sell off the generation component," said Weyers. "Those plants get bought up by the big national companies. If that happens here, I don't see how Wisconsin energy companies can survive as anything more than bit players in the new industry."

A weakened state energy industry isn't good for the economy, the individual businesses, or customers, Weyers said. "Losing the electric generation business to out-of-state companies is going to result in a loss of high-paying jobs in Wisconsin and, maybe, higher rates," he said. "Adopting this proposal will keep rates low and help Wisconsin companies thrive."

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