Integrys Energy Group Inc. (TEG) continues to expand and improve its utility infrastructure. The company has announced that its business unit Peoples Gas has started its natural gas modernization program for 2014. Peoples Gas intends to invest $0.3 billion for the project.
Peoples Gas and the five contractors – Intren, KS Energy Services, Meade, Michels Pipeline Construction and NPL – will jointly upgrade the utility’s natural gas system based in Chicago, Ill.
Per the program, they will install polyethylene main, retire aging cast iron pipes and shift meters to the outside of buildings. In addition, the companies will improve system pressure. These initiatives will enable Peoples Gas to provide reliable natural gas distribution services to its customers.
The U.S. government continues to impose new guidelines to maintain reliability in natural gas supply. The Pipeline and Hazardous Materials Safety Administration’s main aim is to improve the aging natural gas pipelines in the U.S.
We note that Integrys Energy is religiously following government mandates and continues to improve its existing infrastructure while adding new assets to its portfolio. During third-quarter 2013, the company installed around 20 miles of main in Chicago under its natural gas main replacement project. Over the next 10 years, Integrys Energy plans to modernize its old natural gas infrastructure in the state of Illinois.
In Jul 2013, the Illinois General Assembly passed the Natural Gas Consumer, Safety & Reliability Act (Public Act 98-0057). The act will enable utility providers to recoup their invested fund for infrastructure development through customer bills adjustment and encourage the companies to invest more to upgrade their aging assets.
Under its capital expenditure program, Integrys Energy invested $0.47 billion during the first nine months of 2013. The company plans to invest approximately $2.9 billion within a time span of 2013 to 2015.
The timely completion of these projects will enable Integrys Energy to provide uninterrupted natural gas services to its customers while improving consumer safety.
Integrys Energy currently has a Zacks Rank #2 (Buy). Other players in the utility industry looking equally good at current levels include CMS Energy Corporation (CMS), Entergy Corporation (ETR) and Exelon Corporation (EXC). All these stocks hold a Zacks Rank #2.
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