Integrys Energy Services Announces Definitive Agreement for Sale of Wholesale Natural Gas Marketing Business

CHICAGO, Oct. 29 /PRNewswire-FirstCall/ -- Integrys Energy Group, Inc. (NYSE: TEG) today announced that its nonregulated subsidiary, Integrys Energy Services, Inc., (Energy Services) has signed an agreement to sell its wholesale natural gas marketing business in a two-part transaction.

The first part of this transaction involves substantially all of Energy Services' wholesale natural gas marketing business, which generated physical volumes of 445.6 billion cubic feet (Bcf) in 2007 and 594.9 Bcf in 2008. Closing for this part of the deal is anticipated by the end of the fourth quarter of 2009, and is expected to reduce collateral support requirements by $290 million.

The second part of this transaction includes 11.5 Bcf of storage contracts. Between now and April 2011, Integrys Energy Services will provide the buyer with fee-based services related to approximately 8 Bcf of the 11.5 Bcf total retained storage contracts. The remaining 3.5 Bcf of the retained storage will be divested in the normal course of business and is expected to be completed in the first quarter 2010. Following the completion of the provision of such services to the buyer in April 2011 and Energy Services' sale of the remaining 8 Bcf of the retained storage contracts at that time, collateral support requirements are expected to be reduced by an additional $150 million.

Other financial terms and conditions are not being disclosed at this time. The two-part transaction requires certain customary contractual consents and regulatory approvals.

"These transactions are consistent with the ultimate goals of our strategy change we set forth earlier this year, namely to reduce our capital investment and collateral support requirements for Integrys Energy Services," said Charles A. Schrock, President and Chief Executive Officer of Integrys Energy Group. "Terms for the sale of the wholesale natural gas business are in line with our expectations for the nonregulated segment strategy change."

J.P. Morgan Securities acted as exclusive financial advisor to Integrys Energy Group and Thorndike Landing acted as lead advisor to Integrys Energy Services for this transaction.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. You can identify these statements by the fact that they do not relate strictly to historical or current facts and often include words such as "anticipate," "expect," "intend," and other similar words. Forward-looking statements are beyond the ability of Integrys Energy Group to control and, in many cases, Integrys Energy Group cannot predict what factors would cause actual results to differ materially from those indicated by forward-looking statements. Please see Integrys Energy Group's periodic reports filed with the Securities and Exchange Commission (including its 10-K and 10-Qs) for a listing of certain factors that could cause actual results to differ materially from those contained in forward-looking statements.

About Integrys Energy Group, Inc.

Integrys Energy Group is a diversified holding company with regulated utility operations operating through six wholly owned subsidiaries, Wisconsin Public Service Corporation, The Peoples Gas Light and Coke Company, North Shore Gas Company, Upper Peninsula Power Company, Michigan Gas Utilities Corporation, and Minnesota Energy Resources Corporation; nonregulated operations serving the competitive energy markets through its wholly owned nonregulated subsidiary, Integrys Energy Services; and also a 34% equity ownership interest in American Transmission Company LLC (an electric transmission company operating in Wisconsin, Michigan, Minnesota, and Illinois).

More information about Integrys Energy Group, Inc. is available online at www.integrysgroup.com.

SOURCE Integrys Energy Group, Inc.