PORT HURON, Mich., Sept. 7 /PRNewswire/ -- SEMCO ENERGY GAS COMPANY today
announced it has applied to the Michigan Public Service Commission (MPSC) for
approval to extend its current Customer Choice Program from April 1, 2002
through March 31, 2005, at an estimated fixed cost of $4.99 per thousand cubic
feet (Mcf). The actual cost will be determined by the market price on the day
SEMCO ENERGY actually locks in its gas supply contracts.
The current Customer Choice Program, which began April 1, 1999, expires
March 31, 2002. The current program rate is $3.24 per Mcf.
SEMCO ENERGY is the only natural gas distribution company in Michigan to
seek permission to extend a Customer Choice program, which includes fixed
rates, for its customers.
"We believe this program, incorporating a fixed rate for three years, is
the best way to protect our customers from the volatility of the natural gas
market," said Jon A. Kosht, SEMCO ENERGY GAS COMPANY President and Chief
Executive Officer. "While this proposed rate includes an increase in the
amount customers will pay for natural gas it also provides a shield against
the price spikes the market experienced earlier this year. Our current
program protected SEMCO ENERGY customers from significant price increases then
and we'd like the opportunity to continue to offer this type of price
certainty for an additional three years.
"As a result of our current Customer Choice program and fixed rates, the
MPSC estimates that our customers have saved $112 million in energy costs in
2000 alone," Kosht said. "If our proposal to the MPSC is approved, SEMCO
ENERGY customers may see similar benefits over the next three years in an
environment of higher gas prices."
If SEMCO ENERGY is not allowed to extend its fixed rate program, its Gas
Cost Recovery (GCR) clause will automatically be reinstated April 1, 2002.
The GCR is the regulated amount the utility may charge customers in order to
recoup the costs of buying natural gas on the market. The MPSC has the
authority to adjust the GCR factor based on the variability in natural gas
market prices. The MPSC suspended SEMCO ENERGY's GCR factor in April 1999
when the experimental Customer Choice program went into effect.
As in the current program, SEMCO ENERGY is proposing that the new three-
year fixed rate program include an incentive clause for the utility to reduce
its costs below a prescribed level and, if successful, to share a portion of
the savings with customers when the company's profits exceed levels approved
by the MPSC.
SEMCO ENERGY, in its filing, asked the MPSC for a ruling by November 30,
2001, making the new program effective April 1, 2002.
SEMCO ENERGY GAS COMPANY, a division of SEMCO ENERGY, Inc. (NYSE: SEN),
distributes natural gas to more than 250,000 residential, commercial and
industrial customers in Michigan. The Alaska division, ENSTAR Natural Gas
Company, distributes natural gas to more than 100,000 customers in Anchorage
and surrounding areas. SEMCO ENERGY, Inc. also owns and operates businesses
involved in natural gas engineering and quality assurance services, pipeline
construction services, propane distribution, intrastate pipeline and natural
gas storage in various regions of the United States. In addition, it provides
information technology and outsourcing services, specializing in the mid-range
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SOURCE SEMCO ENERGY, Inc.
Web site: http: //www.semcoenergy.com
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