The proposed merger of Northern States Power Co. and Wisconsin Energy Corp. to form Primergy has been called off because of delays by regulatory authorities at both the federal and state levels.
"After thorough consideration, we have mutually agreed to terminate our plans," said Richard A. Abdoo, Wisconsin Energy chair, president and CEO. "The stockholders, customers and employees of both companies have waited too long and there is no certainty the matter will ever be decided by regulatory authorities."
Citing concerns over transmission constraints and resulting market power, the Federal Energy Regulatory Commission at its May 14 hearing voted to delay the proposed merger of Wisconsin Electric Power Co. and Northern States Power Co.
In April, the Minnesota Public Utilities Commission had decided to delay a decision regarding the merger due to allegations of improper contacts between Wisconsin PSC Commissioner Daniel Eastman and Abdoo. In early May, Daniel Eastman was cleared of any criminal wrongdoing involving the merger by Dane County District Attorney William Foust. A separate investigation still is pending by the Milwaukee County District Attorney's office.
In an initial decision, a FERC administrative law judge had found that the applicants had shown that the merger would not significantly affect competition in the nonfirm Wisconsin Upper Michigan System market. However, at its May hearing, the FERC disagreed and reversed the judge's findings. The FERC found that the judge's decision had been based on a nonstandard model run through a computer market simulation. Despite its findings, the FERC noted that it does not want to discourage development of computer models for use in merger analysis.