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SEMCO ENERGY, Inc. Spawns New IT Company
                 Aretech Information Services, Inc. Launches;
                     J.D. Edwards ASP Agreement Announced

PORT HURON, Mich., April 27 /PRNewswire/ -- Aretech Information Services, Inc., an information technology company specializing in outsourcing, was introduced today by SEMCO ENERGY, Inc., a diversified energy and infrastructure company that distributes natural gas to more than 357,000 combined customers in Michigan and Alaska. The company also performs engineering and construction services for energy companies in the United States.

Recognizing the opportunities available in providing a broad range of information technology (IT) business solutions, Aretech (pronounced r-eh-tek) evolved from SEMCO ENERGY's existing IT department as an effort to leverage its existing assets. Aretech has technical expertise in mid-range computers and has recently built a state-of-the-art information technology center in Michigan.

Specifically, Aretech's business plan focuses on the mid-range computing market, which has been neglected by larger IT services companies. In particular, Aretech will focus on four key offerings: IT outsourcing services aimed at mid-sized companies with AS/400 platforms; application service provider (ASP) services through an agreement with J.D. Edwards; business-to- business e-commerce through the creation of a supplier exchange; and, business-to-consumer e-commerce, including offerings such as electronic bill presentment. Outsourcing services will include platform operations, application operations, applications management, network management, desktop services and business operations. Aretech has already received preliminary commitments and indications of intent from prospective corporate clients.

The company's goal is to reach annual revenues in the range of $100 million to $200 million within five years both from basic customer growth and through strategic acquisitions. Acquisitions in later years may require some modest capital investments. Aretech is a wholly owned subsidiary of SEMCO ENERGY. It was formed in December 1999, and is located in a new operations center in Marysville, Mich.

"Aretech is an excellent fit to our strategic growth plan. Its springboard is our investment in technology assets and people with valuable expertise and skills," said chairman and chief executive officer of SEMCO ENERGY, Inc., William L. Johnson. "We identify under-serviced niches in selected infrastructure markets, and aim to provide those missing services in a high-quality, efficient and cost-competitive manner. The market for Aretech services in IT infrastructure is significant in size and growing rapidly. We expect it to provide incremental value to SEMCO ENERGY's shareholders by turning a cost center into a profit center."

Aretech will continue to deliver IT services to SEMCO ENERGY's gas distribution, engineering, construction, and propane, pipeline and storage businesses in a way that both reduces cost and improves the quality of service to customers.

The Market

"Information technology plays a vital and enabling role in corporate business activity," said Rudolfo Cifolelli, president of Aretech Information Services and senior vice president and chief information officer of SEMCO ENERGY, Inc. "Effectively deployed, IT can provide a business with the knowledge, control and understanding to improve business operations. Over the past decade, it has been a growing trend for companies to focus on their core business activities and outsource all non-core functions. Increasingly, IT is one of those functions. Aretech seeks to address the need for companies to have a technically competent, economical, and business savvy partner -- a concept commonly referred to as smartsourcing."

According to a 1999 INPUT report, potential revenues for outsourcing in the computer services industry in Aretech's target Midwest market is expected to reach $16 billion by 2002, and projections state that the application service provider trade will grow to over $21 billion in the United States by 2001. In addition, the large potential of Internet-related services has been estimated in trillions of dollars.

Aretech Leadership

Cifolelli has considerable experience in launching technology-outsourcing companies. He joined SEMCO ENERGY in 1998 after serving two years as president and owner of OACIS, Inc., a computer consulting firm he founded in 1996 after 15 years with MCN Energy Group, Inc. In 1983, he led the development of a computer services outsourcing business focused on main frame computers, which he later grew to more than $120 million in annual revenue. Clients included many Fortune 500 companies. Cifolelli's extensive data processing experience includes management positions for the National Bank of Detroit (now Bank One), Ex-Cell-O Corp., and Ling Temoco Vought, a Texas-based defense contractor. His achievements also include the development of a healthcare outsourcing practice for Compuware.

J.D. Edwards ASP Agreement

As a first step, Aretech will act as an Application Service Provider (ASP) for J.D. Edwards & Company (Nasdaq: JDEC), a supplier of software solutions for e-business. Aretech will handle the hosting, implementation, configuration and on-going support activities for J.D. Edwards' OneWorld(TM) enterprise software as a member of the Company's JDe.sourcing program. OneWorld is a market- leading e-business application for supply chain collaboration and fulfillment across multiple vertical industries.

Target markets for the Aretech/J.D. Edwards offerings include the automotive component suppliers located throughout the Midwest and certain eastern U.S. states, as well as the gas and electric utility industry, water and sanitary services, construction services, oil and gas extraction, and engineering services companies.

"Through its affiliation with SEMCO ENERGY, Inc., Aretech has both the vertical industry knowledge and the technical ability to get our customers up and running quickly and to effectively manage their applications and services to give them competitive advantage in the New Economy," said Gayle Sheppard, vice president of J.D. Edwards' JDe.sourcing application hosting program.

About Aretech

Aretech Information Services, a provider of information technology-enabled business solutions, is a wholly owned subsidiary of SEMCO ENERGY, Inc. (NYSE: SEN). Its mission is to measurably and significantly contribute to productivity in business by effectively utilizing the potential of information technology and providing quality commercial information technology services, which will allow Aretech's customers to focus on their core business(es) and succeed in their chosen industries. For more information, please visit the www.semcoenergy.com/aretech.html .

About SEMCO

SEMCO ENERGY, Inc. is a diversified energy services and infrastructure holding company that operates energy-related business segments, including gas distribution, engineering services and construction services, as well as propane, pipelines and storage. The Company is the third largest distributor of natural gas in Michigan and the largest distributor in the state of Alaska. The engineering services business segment serves the natural gas distribution and transmission, oil products, exploration/production and telecommunication industries. The construction services business segment provides underground pipeline installation and replacement for the natural gas distribution industry. The propane, pipelines and storage segment operates intrastate gas transmission pipelines and underground natural gas storage in Michigan. For more information, please visit www.aretech-is.com .

About J.D. Edwards

J.D. Edwards is the leading provider of agile business-to-business software solutions that make new business models work. The Company's integrated ActivEra(TM) Solutions deliver supply chain collaboration and fulfillment, and enable business-to-business trading communities in the consumer products, industrial and services industries. The Company's solutions are web-enabled and operate in multiple computing environments. Founded in 1977, J.D. Edwards is headquartered in Denver and posted fiscal 1999 revenues of $944.2 million. Additional information can be obtained by contacting the Company via the Internet at www.jdedwards.com or at 800-727-5333.
SOURCE SEMCO ENERGY, Inc.
Web site: http: //www.semcoenergy.com/aretech.html
CONTACT: Lisa Vallee-Smith, 313-567-5027, vallee-smith@franco.com, for Aretech; Francis R. Lieder, Jr., 810-987-2200, ext. 4186, francis.lieder@semcoenergy.com, or Analysts, Edric R. Mason, Jr., 810-989-4104, edric.mason@semcoenergy.com, both of SEMCO
NOTE TO EDITORS: Aretech Information Services will be hosting a webcast on Thursday, April 27 at 11 a.m. To view the webcast, please go to http://www.videonewswire.com/ARETECH/042700 .

"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.

 
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