While Wisconsin winters freeze Lake Superior, Wisconsin Energy warms the interiors of Wisconsin homes and businesses. The company's utilities provide electricity to more than 1.1 million customers and natural gas to almost 1.1 million customers in eastern and northern Wisconsin and Michigan's Upper Peninsula. It also serves about 440 steam customers in downtown Milwaukee. Wisconsin Energy has about 6,020 MW of generating capacity, primarily from coal-fired and nuclear-powered plants. The company's primary utility subsidiaries, Wisconsin Gas and Wisconsin Electric, operate together as We Energies. Non-utility operations include power generation leasing and real estate development.
Wisconsin Energy provides electric and natural gas service to customers in areas of Wisconsin and the Upper Peninsula of Michigan.
The company operates a utility energy segment and a non-utility energy segment. Its primary subsidiaries are Wisconsin Electric, and Wisconsin Gas, and W.E. Power, LLC (We Power). Utilities Wisconsin Electric and Wisconsin Gas operate together under the trade name of "We Energies." The company’s non-utility energy segment, We Power, designs, builds, owns, and leases four Wisconsin Electric generation plants constructed as part of its Power the Future strategy.
In addition, Wisconsin Energy other non-utility operations include Wispark and Bostco, which develop and invest in real estate projects primarily in southeastern Wisconsin.
The company has about 270 generating plants (including coal, natural gas fired and renewable), 21,457 pole-miles of overhead distribution lines and 24,303 miles of underground distribution cable, as well as about 350 distribution substations and 295,561 line transformers. Its gas distribution system includes 21,382 miles of distribution and transmission mains connected at 184 gate stations to the pipeline transmission systems of ANR Pipeline Company, Guardian Pipeline L.L.C., Natural Gas Pipeline Company of America, Northern Natural Pipeline Company, Great Lakes Gas Transmission Company, Viking Gas Transmission, and Michigan Consolidated Gas Company.
Sales and Marketing
Wisconsin Energy provides electric utility service to a range of customers in such industries as paper, foundry, food products and machinery production, as well as to large retail chains. Prior to September 2013, its largest retail electric customers were two iron ore mines located in the Upper Peninsula of Michigan. The combined electric energy sales to the two mines accounted for 4% of its total electric utility energy sales during 2013. (The two companies returned as retail customers in 2015).
During 2014, it sold wholesale electric power to two rural cooperatives, and two municipal joint action agencies located in the states of Wisconsin and Michigan. Its wholesale electric energy sales were also made to one other public utility in the region under rates approved byF ERC. Wholesale sales accounted for 5.7% of Wisconsin Energy's electric energy sales and 3.9% of its electric operating revenues in 2014.
That year the majority of its sales for resale were to one Regional Transmission Organization (RTO), at market rates based on availability of its generation and RTO demand. In 2014, sales for resale accounted for 19.9% total electric energy sales and 7.8% of total electric operating revenues.
Wisconsin Energy's net revenues increased by 10% in 2014 due to increased sales from the Utility segment. Electric utility operating revenues increased because of higher resales into the MISO Energy Markets as a result of Michigan's alternative electric supplier program, and higher availability of generating units driven by the recognition related to revenues under the System Support Resource agreement with MISO.
Electric fuel and purchased power costs increased primarily due to increase in total MWh sales and higher generating costs driven by an increase in natural gas prices. Total retail gas margins increased primarily because of colder winter weather in 2014 pushing up demand.
In 2014 the company's net income increased by 10% due to higher revenues, partially offset by increased costs of gas sold.
That year Wisconsin Energy's net cash provided by the operating activities decreased by $33.3 million due to a change in accounts receivable and accrued revenues, inventories, and accrued income tax.
The company has three primary investment opportunities and earnings streams: its regulated utility business; its minority investment in ATC; and its generation plants within its non-utility energy segment. Its Power the Future strategy was designed to address Wisconsin Electric's electric supply needs by increasing the electric generating capacity in Wisconsin while allowing the company to maintain a diversified fuel mix, by including both new coal-fired plants and natural-gas fired plants.
Wisconsin Energy's strategy is to invest in new gas, coal, and green energy plants, and upgrade existing plants and its distribution system, while selling non-core assets. To meet clean energy regulations, Wisconsin Energy has been shifting the mix of its energy portfolio towards greener supply sources.
It has taken several steps to pursue a proactive strategy to manage its environmental compliance obligations, including: the development of additional sources of renewable electric energy supply; the review of water quality matters such as discharge limits and cooling water requirements and implementing improvements to its cooling water intake systems as needed; the addition of emission control equipment to existing facilities to comply with new ambient air quality standards and federal clean air rules; the conversion of the fuel source for VAPP from coal to natural gas; the beneficial use of ash and other solid products from coal-fired generating units; and the clean-up of former manufactured gas plant sites.
The company invested about $711 million in 2014, mainly for upgrading its electric and gas distribution systems.
In 2013 Wisconsin Energy's coal plants still accounted for the bulk of its generating capacity, and the company faces significant costs in order to comply with environmental regulations and remediation compliance standards going forward, even as its shifts to more efficient and greener power operations. (In 2012 We Energies announced plans to convert the fuel source for the Valley Power Plant from coal to natural gas).
In 2013, We Energies placed the biomass-fueled power plant on the site of Domtar Corporation's Rothschild, Wisconsin into commercial operation. That year We Energies and Wolverine Power Cooperative decided to end their joint venture at the Presque Isle Power Plant.
Mergers and Acquisitions
Ina major move, in 2014 Wisconsin Energy announced plans to acquire rival Integrys in a transaction valued at $9.1 billion. Upon completion of the transaction, the combined company will be named WEC Energy Group, Inc., and will own 60% of ATC. The combined company is planned to serve more than 4.3 million total gas and electric customers across Wisconsin, Illinois, Michigan and Minnesota, and operate nearly 71,000 miles of electric distribution lines and more than 44,000 miles of gas transmission and distribution lines.
To raise cash, in 2012 Wisconsin Electric Power sold its 25% stake in Edgewater Generating Station Unit 5 to Wisconsin Power and Light for $38 million.
In 2011 the company completed the extensive emission-control system retrofitting and upgrade of its 615 MW coal-fired Oak Creek Power Plant Unit 2. (The upgrade of Unit 1 was completed in 2010).
Wisconsin Energy sold a number of assets in 2009 and 2010 in order to pay down debt and focus on its core businesses. It sold its water utility to the City of Mequon, Wisconsin for $14.5 million, and power utility to Edison Sault to Cloverland Electric Cooperative $61.5 million.
The company was founded in 1981 and became a diversified holding company in 1986.