PORT HURON, Mich., Nov. 9 /PRNewswire/ -- SEMCO ENERGY GAS COMPANY today
announced the withdrawal of its request to extend its Customer Choice Program,
which included a frozen gas cost. Under the SEMCO ENERGY proposal, a frozen
gas cost would have been in effect from April 1, 2002, through March 31, 2005.
The utility will instead reinstate its Gas Cost Recovery (GCR) pricing system
when the current Customer Choice Program expires on March 31, 2002.
Gas Company President Jon A. Kosht said the application, filed in
September, was withdrawn this week after SEMCO ENERGY was unable to reach an
agreement with the Michigan Public Service Commission (MPSC) staff and other
interested parties on a frozen rate for natural gas for the three years of the
proposed extended program.
SEMCO ENERGY sought a maximum price of $4.99 per thousand cubic feet (Mcf)
with the actual price determined by the market price on the day SEMCO ENERGY
would have received authorization from the MPSC.
MPSC staff contended the $4.99 Mcf price was too high and that the frozen
rate conflicts with efforts to develop a Gas Customer Choice Program for the
state of Michigan.
"We are, of course, disappointed that an agreement could not be reached
that would have allowed SEMCO ENERGY to continue our frozen rate program to
our customers," Kosht said. "The benefits of a frozen rate were proven in
February of this year when SEMCO ENERGY customers were shielded from the
sudden volatility in the natural gas market. We had hoped to continue to
offer similar benefits through an extension in the Customer Choice Program."
According to MPSC estimates, SEMCO ENERGY customers saved $112 million in
energy costs in 2000 alone because of the frozen price.
SEMCO ENERGY was the only natural gas distribution company in Michigan to
seek permission to extend a Customer Choice program with a fixed price for
When the current three-year program ends March 31, 2002, SEMCO ENERGY's
GCR clause will automatically be reinstated. The GCR is the regulated amount
a 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. A surcharge or refund is
passed along to the customer if actual gas costs incurred by the utility are
higher or lower than estimates. The MPSC suspended SEMCO ENERGY's GCR factor
in April 1999 when the experimental Customer Choice program went into effect.
SEMCO ENERGY GAS COMPANY, a division of SEMCO ENERGY, Inc. (NYSE: SEN),
distributes natural gas to more than 267,000 residential, commercial and
industrial customers in Michigan. The Alaska division, ENSTAR Natural Gas
Company, distributes natural gas to more than 102,000 customers in Anchorage
and surrounding areas. The Company 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
MAKE YOUR OPINION COUNT - Click Here
SOURCE SEMCO ENERGY GAS COMPANY
Web site: http: //www.semcoenergy.com
CONTACT: Media Contact: Francis R. Lieder, Manager of Corporate Communications and Media Affairs, +1-810-987-2200, ext. 4186, fax: +1-810-989-4098, email: email@example.com , or Analysts Contact: Thomas Connelly, Director of Investor Relations, +1-248-702-6240, email: firstname.lastname@example.org , both of SEMCO ENERGY GAS COMPANY