Integrys Plans to Add CNG Stations

Zacks

Integrys Energy Inc.‘s (TEG) operating wing Trillium CNG announced plans to expand its compressed natural gas (“CNG”) fueling network by constructing 101 public access Class 8 accessible CNG stations by 2016. The company intends to build these stations across 29 states and near major interstate highways to meet customer demand.

For public access to these stations, Integrys Energy will secure a fuel purchase agreement with an anchor customer for each CNG station. The addition of fueling facilities will enable Integrys Energy to supply CNG to a larger number of fleets running on busy trucking routes.

The abundance of natural gas and its clean burning nature are making it increasingly popular as a transportation fuel. CNG is cost-effective and more eco-friendly than diesel. In fact, we have already seen how cheap natural gas has gained traction at the utilities, replacing coal, for the generation of electricity.

Meanwhile, the U.S. automotive manufacturing capacity is projected to rise 4.4% in the period 2013 through 2018 while the trucking industry will witness steady growth in the upcoming years. In addition, by 2040, usage of CNG in heavy-duty vehicles will climb to 1 trillion cubic feet per year which will displace 0.5 million barrels per day of diesel use as per the Energy Information Administration.

We believe Integrys Energy’s CNG stations will capitalize on the favorable auto and truck industry outlook. It has been progressively developing its CNG operations over time. Last year, the company inked a high-quality agreement with AMP Americas to establish a network of CNG stations in America.

Currently, Integrys Energy retains a Zacks Rank #2 (Buy). Other utility counterparts also well positioned at the moment are Zacks Ranked #2 (Buy) Alliant Energy Corp. (LNT), Black Hills Corp. (BKH) and DTE Energy Company (DTE).

Based in Chicago, Ill., Integrys Energy is a diversified energy holding company engaged in regulated and non-regulated energy operations in the United States.

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