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U.S. Energy Services Buys Integrys Unit

Minneapolis-based U.S. Energy Services has acquired the energy management business of Integrys Energy Services Inc., a subsidiary of Chicago-based Integrys Energy Group Inc., the companies said last Monday.

Through its energy management services business, Integrys Energy Services provided energy consulting and information services for facility and corporate customers in the areas of risk management, strategic sourcing, utility data management and demand-side energy management. U.S. Energy Services said it will provide former Integrys customers access to an expanded list of services and attention to carbon management strategies, as well as expanded reach to European markets.

With more than $1.5 billion of annual energy spending under management, U.S. Energy Services is one of the nation's largest energy management firms. The acquisition will increase its existing client base of more than 2,000 nationwide, the company said. The transaction will also add a U.S. Energy Services office in Louisville, KY, in addition to its existing three offices in Minneapolis, Kansas City and Omaha, NE.

Terms were not disclosed, but Integrys Energy Group said the value realized is in line with expectations associated with its nonregulated segment divestiture. The deal is expected to close in the third quarter.

U.S. Energy Services offers gas and electric supply procurement, nominations, physical and financial hedging, tariff analysis and optimization, energy accounting, bill verification and online reporting of usage and costs.

Integrys Energy Group owns Wisconsin Public Service Corp., The Peoples Gas Light and Coke Co., North Shore Gas Co., Upper Peninsula Power Co., Michigan Gas Utilities Corp. and Minnesota Energy Resources Corp.; nonregulated operations serving energy markets in the United States and Canada through subsidiary Integrys Energy Services; and a 34% equity interest in American Transmission Co. LLC, an electric transmission company operating in Wisconsin, Michigan, Minnesota and Illinois.

Last week it was announced that the Canadian trading arm of Shell Energy North America LP would buy nearly all of the natural gas and power customer contracts of Integrys Energy Services of Canada Corp. (see NGI, July 20).

Earlier this year Integrys Energy Group said it would sell either entirely or partially nonregulated Integrys Energy Services, or significantly reduce the scope and scale of the business (see NGI, March 9).

At Intelligence Press Inc.'s GasMart 2009 in Chicago last spring Larry Borgard, president of the Integrys utilities business, said the company was pursuing a back-to-basics strategy. "Many of our shareholders appreciate the fact that we pay big dividends," Borgard said. "You know the old story about utilities being the stock of widows and orphans. I think that's largely true today as we all kind of get back to basics and back to our core utility operations" (see NGI, May 25).

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