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SEMCO ENERGY SERVICES to Market Meter Reading Systems, Services

PORT HURON, Mich., June 9 /PRNewswire/ -- Seizing opportunity to provide for the needs of smaller utilities and municipal water companies, SEMCO ENERGY SERVICES, INC. (Nasdaq: SMGS) has entered into an agreement with Jackson, Michigan-based HARRIS-MCBURNEY SERVICES, INC. to jointly market meter reading systems and various utility support services, including automatic meter reading (AMR) products and services.

Under the agreement, SEMCO ENERGY SERVICES and HARRIS-MCBURNEY will sell, install and operate meter reading systems and provide project management services. Prospective customers include smaller gas and electric utilities and municipal water companies. The firms initially will be focusing their efforts in the midwest but could expand as national opportunities present themselves.

The alliance complements other agreements SEMCO has entered into with Itron, Inc. (Nasdaq: ITRI), a Spokane, Washington-based manufacturer of AMR products and services. Automatic meter reading employs low-frequency radio waves to transmit consumption data directly from meters to a fixed or mobile point for processing and subsequent billing.

"Call it revolution or evolution, the message is clear: it's absolutely critical to know your customer -- in this case, municipal water utilities and small electric and gas companies -- and deliver products and services that completely meet their needs," said Steve Malkiewicz, Senior Vice-President, SEMCO ENERGY SERVICES. "With this alliance we can provide the equipment install it and manage the process at a lower cost than our customers now pay."

SEMCO ENERGY SERVICES is a unit of SEMCO ENERGY, INC. and is a diversified company with investments and operations in many segments of the natural gas industry. Its nationwide customers include industrial, commercial and municipal natural gas users, distribution companies and other marketers. The company's gas marketing activities accounted for 130 Bcf in 1996 and includes industrial, commercial and municipal customers in several states, SEMCO ENERGY'S affiliate, SEMCO ENERGY GAS COMPANY is in the process of installing AMR across its 235,000-customer service area.

HARRIS-MCBURNEY, a performance contractor serving the utility industry since 1935, provides a wide variety of engineering field and installation services to gas, electric, water and telecommunications companies. In addition to its Novi and Jackson, Michigan headquarters, the firm has offices and operations in Tampa and Nokomis, Florida; Charlotte and Raleigh, North Carolina; Rochester, New York; and Roanoke, Virginia.

"This alliance is part of our strategic plan to expand the scope of the deregulated, energy services part of our business, thus creating alternative sources of revenue. As profit margins become leaner on the industry's core products, looking for returns well beyond those achieved in the regulated delivery business makes these alliances a critical strategic activity, " said William L. Johnson, SEMCO ENERGY President and Chief Executive Officer.
CONTACT: Steve Malkiewicz of Semco Energy Services, 810-987-2200, or fax, 810-987-4507

"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.

©2006 SEMCO ENERGY, Inc., All Rights Reserved.