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Integrys Energy Inc.’s (TEG - Analyst Report) subsidiary Wisconsin Public Service Corporation has received approval from the Public Service Commission of Wisconsin to implement a 5-year System Modernization and Reliability Project (SMRP). The company will invest $220 million in this venture.

Per the project, Integrys Energy will convert over 1,000 miles of overhead power distribution lines to underground. Further, the company will add distribution automation equipment on another 400 miles of line. Integrys Energy chose the overhead lines segments which can be switched to underground at a much reasonable rate.

Integrys Energy will start the project in 2014 and complete it by 2019. The company initially conducted a small pilot reliability improvement project in 2012 and collected several data from it. Later, Integrys Energy utilized the data for developing this project.

In Integrys Energy’s service territory in Wisconsin, supply of power is disrupted by weather-related issues, which damage electrical equipment. Electricity reliability is thus much lower than the state and national averages, particularly in heavily forested rural lands in northern Wisconsin.

One of the main reasons to invest in this project is to minimize outages and provide uninterrupted services to its customers. These initiatives will subsequently improve reliability, consumer confidence as well as public safety.

On completion of the project, the monthly rate of electricity will increase by approximately $5 for an average residential customer. It is a regular practice for the regulated utility companies to recoup their invested funds from the consumers through rate increases.

Integrys Energy invests regularly for the improvement of its utility transmission and distribution operations, as well as for the installation of modern technologies. Currently, the company and Alliant Energy Corporation (LNT - Snapshot Report) are engaged in a modernization project at the Columbia plant. During the first quarter of 2013, the company spent $147 million under its capital spending program.

During the first three months of 2013, Integrys Energy’s cash flow from operating activities was $319.6 million. A stable financial position allows the company to follow steady infrastructure development activities.

Integrys Energy currently has a Zacks Rank #1 (Strong Buy). Other stocks from the industry that are also presently performing well include Companhia Paranaense de Energia (ELP - Analyst Report) with a Zacks Rank #1 (Strong Buy), and Calpine Corporation (CPN - Snapshot Report) with a Zacks Rank #2 (Buy).

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