Wisconsin Energy Corp., Northern States Power Co. Agree to Terminate Merger Proceedings

May 16, 1997, 01:00 ET from Wisconsin Energy Corp.

    MILWAUKEE and MINNEAPOLIS, May 16 /PRNewswire/ -- Richard A. Abdoo,
 chairman, president and chief executive officer of Wisconsin Energy Corp.
 (NYSE:   WEC), and James J. Howard, chairman, president and chief executive
 officer of Northern States Power Co. (NYSE:   NSP), today announced that the
 boards of directors of both companies have agreed to terminate plans to merge
 the two companies.  The Merger Agreement would have combined WEC and NSP into
 Primergy Corporation which would have resulted in $2 billion of cost
 reductions benefiting customers and stockholders.
     "We filed applications two years ago to join the companies.  Our purpose
 was to form a combined enterprise that would create greater value for our
 customers and shareholders," Howard said.  "We anticipated a 12- to 18-month
 approval process because we complied with the requirements for all previously
 approved mergers.
     "What we encountered were regulatory agencies that were changing their
 merger policies as they were considering our filing," he said.  "The Federal
 Energy Regulatory Commission's decision and its analysis of the market power
 issues -- released earlier this week and remanding the discussion for further
 negotiation among the parties -- confirm that its policies are still being
 developed.  Unfortunately, the regulators have chosen applications like this
 one to resolve many of these issues.  There is simply no end to this process
 in sight."
     "At this time," Abdoo said, "it's important for us to take advantage of
 other opportunities. Continuing the Primergy transaction, given the current
 regulatory climate, is not in the best interests of our stockholders,
 customers and employees."
     Abdoo said there were many factors in reaching the decision to terminate
 the Merger Agreement, including: the FERC action; the fact that any regulatory
 approvals that might be obtained appear to be heading in the direction of
 significantly reducing the benefits of the Primergy transaction; and the
 impact on stockholders, customers and employees of at least another six months
 of delay as a result of the FERC action after almost a two year wait.
     "After thorough consideration, we have mutually agreed to terminate our
 plans," Abdoo stated.  "The stockholders, customers and employees of both
 companies have waited too long and there is no certainty the matter will ever
 be decided by the regulatory authorities."
     Abdoo and Howard have agreed to examine several potential collaborative
 efforts identified during the internal merger planning process.
     The companies announced their merger plans May 1, 1995, and filed
 applications in July and August with state and federal regulatory bodies.  To
 date, approvals have been granted by the state regulatory commissions in
 Michigan and North Dakota, but not by the commissions in Minnesota and
 Wisconsin.  Approvals from the Securities & Exchange Commission and U.S.
 Department of Justice also are pending.
     Both companies' boards of directors voted today to end the merger process.
 NSP and Wisconsin Energy will jointly withdraw their merger applications from
 state and federal agencies.
     Wisconsin Energy Corp. is a holding company with subsidiaries in utility
 and non-utility businesses.  Its principal subsidiary is Wisconsin Electric.

SOURCE Wisconsin Energy Corp.