Green Bay based Wisconsin Public Service Corporation ("WPS"), a
Integrys Energy Group Inc
), has filed an appeal to alter its previous electric and natural
gas rate case bids with the Public Service Commission of Wisconsin
("PSCW"). As per the new petition, the company intends to drop its
prior 9.2% electric rate increase and appeal for a marginal
decrease in gas rates for 2013.
The rate modifications come in the face of improved economic
forecasts than that estimated at the outset. Besides, decline in
fuel expenses have led to savings which the company hopes to pass
on to the consumers. Instead, Integrys Energy plans to utilize the
funds for its cost-control initiatives. If the request is approved
by the Commission it will result in no electric rate hike.
The company usually files for rate revisions depending upon its
operational needs, varying market fundamentals and in order to meet
restoration costs rising from unexpected outages or natural
disasters. At the end of July 2012, the company's People Gas and
North Shore Gas subsidiaries applied for a natural gas rate hike
which required People Gas's customers to pay less than $6.50 per
month and North Shore's to pay less than $4.0 a month.
Including the 2013 case, the company over the last six years had
rate changes with an average increase of less than 1%. The
company's involvement in various high-quality gas and transmission
projects has rendered a stable retail rate profile and kept
Integrys Energy well positioned in the U.S. utility market.
We believe the company's continued engagement in strategically
significant takeovers like the recent Fox Energy Company LLC for
$440 million will boost long-term growth opportunities. In
addition, optimum rate charges will enable the company to retain
customer confidence and broaden its consumer footprint. However, we
believe there is a sense of uncertainty as PSCW could overrule the
rate requests proposed by the company which could hurt the
company's business goals. This could impact the company's stock
position in the market.
For 2012, the Chicago-based company anticipates adjusted
earnings in the band $3.00-$3.15 per share. The Zacks Consensus
Estimates for the third quarter and full year 2012 currently stand
at 38 cents per share and $3.09 per share, respectively. One of its
closest peers is
Wisconsin Energy Corporation
Integrys Energy engages in natural gas and electric utility
operations, and non-regulated energy operations in the United
States and Canada. With a market capitalization of $4.26 billion,
the company has 4,619 employees.
INTEGRYS ENERGY (TEG): Free Stock Analysis
WISC ENERGY CP (WEC): Free Stock Analysis
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