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SEMCO ENERGY, Inc. Acquires One Construction Company And Assets of a Second

PORT HURON, Mich., May 15 /PRNewswire/ -- SEMCO ENERGY, Inc. (NYSE: SEN) today announced the acquisition of KLP Construction Co., Inc. as well as certain assets of Lake Area Utilities, Inc.

The acquisitions advance SEMCO ENERGY's goal to develop a national full- service construction company specializing in service to the utility and telecommunications industries.

KLP Construction Co., based in East Peoria, IL, provides natural gas pipeline and fiber optic construction services primarily for the utility industry.

William L. Johnson, Chairman and Chief Executive Officer of SEMCO ENERGY, Inc., announced the acquisition.

"KLP Construction brings communications infrastructure experience to SEMCO ENERGY, plus additional construction opportunities in the upper Midwest and expands our presence in the region, as well," he said. "This fits our stated goal of making strategic acquisitions that will directly contribute toward enhancing shareholder value."

KLP is expected to generate about $5 million in revenue in 2000. The company will become part of Iowa Pipeline Associates, Inc. Iowa Pipelines Associates, Inc. is owned by SEMCO ENERGY VENTURES, a subsidiary of SEMCO ENERGY, Inc.

Kevin Pogue, Vice President of KLP Construction, has accepted the position of Vice President of the Illinois Division of Iowa Pipeline Associates.

KLP Construction serves customers in Illinois, Indiana, Wisconsin and Missouri. The company's clients include Central Illinois Light Co., Illinois Power, Ameren, Southern Indiana Gas and Electric Co., McLeod USA, Inc. and NICOR.

The acquired assets of Lake Area Utilities, Inc. involve specialized underground cable/fiber construction equipment. The acquisition offers Iowa Pipeline Associates substantial growth potential through fiber/cable construction and horizontal directional drilling projects. The company's potential service area includes Iowa, Minnesota and Nebraska.

SEMCO ENERGY, Inc. is a diversified energy and infrastructure services company that distributes natural gas to more than 350,000 customers in Michigan and Alaska combined. The Company has two subsidiaries. SEMCO ENERGY VENTURES owns and operates businesses involved in gas engineering and quality assurance services, pipeline construction services, propane distribution, intrastate pipelines and natural gas storage in various regions of the United States. Aretech Information Services, Inc. is a southeastern Michigan-based information technology company specializing in outsourcing to the mid-range computer market.
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CONTACT: Media, Francis R. Lieder, Jr., 810-987-2200, ext. 4188, fax, 810-989-4098, or Analysts, Edric R. Mason, Jr., 810-989-4104, fax, 810-989-4098, both of SEMCO ENERGY, Inc.

"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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