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Moody's Assigns 'Baa1' Senior Debt Rating to SEMCO ENERGY

PORT HURON, Mich., Aug. 21 /PRNewswire/ -- SEMCO ENERGY, Inc. (Nasdaq: SMGS) today announced it has received a preliminary investment grade senior debt rating of "Baa1" from Moody's Investors Services. Moody's had not previously rated SEMCO ENERGY's securities. Credit ratings characterize the degree of investment risk a purchaser would assume in holding a debt security. With the rating, SEMCO ENERGY adds Moody's assignment to its Standard & Poor's investment grade "BBB" status which, together, further strengthens the Company's ability to access the public financial markets at more reasonable costs.

According to Moody's, the rating reflects the strength and relative stability of SEMCO ENERGY's regulated gas distribution business, which benefits from an above-average growth rate and the Company's management of its growth in both regulated and unregulated businesses.

"We're very pleased with the progress thus far -- our recent stock offering and this credit rating are right in step with our plan to increase SEMCO's financial strength and continually enhance shareholder value," said Chief Financial Officer Robert J. Digan, II.

SEMCO ENERGY is an energy-focused holding company. It has three subsidiaries: 1) SEMCO ENERGY GAS COMPANY distributes regulated natural gas to 240,000 customers in Michigan's Upper and Lower Peninsula; 2) SEMCO ENERGY SERVICES markets gas and related services and 3) SEMCO ENERGY VENTURES operates and acquires companies involved in natural gas pipeline and distribution system construction, construction engineering and propane operations.
CONTACT: Edric R. Mason, Jr. of SEMCO ENERGY, 810-989-4104, or fax, 810-987-4098

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding SEMCO Energy's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.

©2006 SEMCO ENERGY, Inc., All Rights Reserved.