PORT HURON, Mich., Dec. 20 /PRNewswire/ -- Southeastern Michigan Gas
Enterprises, Inc. (Nasdaq: SMGS) has filed a rate case with the Michigan
Public Service Commission (MPSC) consisting of five major components to help
it resolve a series of future, competitive issues.
1. A recovery of $5.5 million in revenue deficiency;
2. The merger of regulated companies, which will accomplish a
single rate structure, a single Gas Cost Recovery mechanism and a
single set of tariffs, rules and regulations;
3. The second phase of an "unbundling" program for residential
4. Innovative rate design, consisting of declining block rates
for sales customers and capacity reservation charges for
transportation customers; and
5. The introduction of incentive regulation, comprised of a
proposal to share excess authorized returns with ratepayers.
Southeastern Michigan Gas Enterprises is filing the rate case in
the name of two of its subsidiaries: Southeastern Michigan Gas Company and
Michigan Gas Company. The rates and regulations of both companies are out of
step with significant changes, including the addition of 40,000 new customers
in recent years. Southeastern Michigan Gas Company has not filed a rate case
with the MPSC in 10 years; Michigan Gas filed its last MPSC rate case six
years ago. An order from the MPSC on the current rate case is expected by
September of 1997.
"Approval by the MPSC of this rate case would bring strategic, financial
and operational benefits to all of our ratepayers. Increased purchasing
economics and streamlining of inventories, integration of operations and
additional financial strength and flexibility are among the benefits of
consolidation. Likewise, reduction in the number of regulatory and reporting
requirements, better utilization of management resources and a single
corporate identity will benefit customers, employees and communities served.
And, our innovative unbundling programs and sharing excess returns with
customers provide for testing the viability of new concepts," said Jon A.
Kosht, Vice President of Gas Supply, Rates & Regulatory Affairs.
The MPSC-approved order would affect the rates of both Southeastern
Michigan Gas and Michigan Gas (MI Gas) Companies. A typical MI Gas customer
(who uses 120 mcf annually) may see an annual increase of about 7%, while a
typical Southeastern customer may see an annual increase of about 10%.
SOURCE Southeastern Michigan Gas Enterprises, Inc.