PORT HURON, Mich., Oct. 8 /PRNewswire/ -- SEMCO ENERGY GAS COMPANY today
announced the signing of a three-year agreement with TransCanada PipeLines
Limited (NYSE: TRP) for management of the company's natural gas supply.
The company also will buy the majority of its natural gas supplies from
TransCanada for the three years of the agreement, which is effective April 1,
1999. Alliances of this type are known in the industry as "asset management"
"This agreement will have positive results for SEMCO ENERGY customers and
shareholders with lower prices for our product and the opportunity to increase
earnings in the future by being on the competitive edge," said William L.
Johnson, Chairman, President and Chief Executive Officer of SEMCO ENERGY, Inc.
A strategic alliance with an asset manager is another move by SEMCO ENERGY
GAS COMPANY to position itself for the competitive market that will exist
after natural gas industry deregulation is completed, said Jon A. Kosht, Vice
President for Rates and Regulatory Affairs.
The company in September announced it will reduce and freeze its gas cost
recovery factor for three years beginning with the April 1999 billing cycle.
The GCR factor is the purchased gas cost component of the rates charged by the
company to its customers.
"This asset management agreement is an opportunity to further optimize our
assets by aligning ourselves with a major player in the natural gas industry,"
TransCanada, based in Calgary, Alberta, is a leading North American energy
services company with businesses in transmission, marketing and processing.
TransCanada Energy markets most forms of energy, including natural gas and
natural gas liquids, crude oil and petroleum products as well as electricity.
Steve Becker, Executive Vice President of TransCanada Gas Services, said the
company's offices in Calgary, Houston and Omaha will be involved in managing
the assets of SEMCO ENERGY GAS COMPANY.
"We're confident TransCanada's asset management expertise will result in
significant efficiencies to help SEMCO keep their products and services
competitive," he said.
The agreement calls for TransCanada to manage 157.5 million cubic feet
(MMcf) of gas transportation daily on five US pipelines on behalf of SEMCO
ENERGY GAS COMPANY. TransCanada also will manage 16 billion cubic feet of gas
storage for the utility.
SEMCO ENERGY GAS COMPANY, a regulated natural gas distributor, has more
than 240,000 customers in the Upper and Lower Peninsulas of Michigan.
SEMCO ENERGY, Inc. has two other subsidiaries: SEMCO ENERGY SERVICES, an
unregulated division which markets natural gas throughout the United States
and Canada; and SEMCO ENERGY VENTURES, which acquires and operates companies
involved in natural gas pipeline and distribution system construction,
pipeline construction engineering and propane operations.
SOURCE SEMCO ENERGY, Inc.
CONTACT: Francis Lieder of SEMCO, 810-987-2200, ext. 4186, or fax, 810-987-4098