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SEMCO ENERGY Michigan Division Settles Rate Case

PORT HURON, Mich., May 5 /PRNewswire-FirstCall/ -- SEMCO ENERGY GAS COMPANY, a division of SEMCO ENERGY, Inc. (NYSE: SEN), has settled its rate case with the Michigan Public Service Commission (MPSC). The Company filed the case in November 2002. This rate change does not affect customers in Battle Creek, MI. Battle Creek, which is regulated by the Battle Creek City Commission, is under a rate freeze through March 31, 2005.

Upon implementation of the authorized rate changes on May 3, 2003, the typical residential customer would see an increase of approximately $12.55 per year or less than $1.05 per month, not including gas charges. Natural gas costs fluctuate based on current market prices and those costs are passed directly to customers without markup in a separate MPSC process.

Residential gas bills will reflect two changes that became effective May 3, 2003. The Customer Charge will increase from $7 to $9.50 per month; and the Distribution Charge will decrease from $0.11502 to $0.10048 per hundred cubic feet. The Customer Charge recovers fixed costs that include maintaining meters, pressure regulators, service piping and the costs of billing. The Distribution Charge covers the cost of transporting gas to customers.

SEMCO ENERGY is a diversified energy and infrastructure company that distributes natural gas to more than 383,000 customers in Michigan and Alaska. It also owns and operates businesses involved in pipeline construction services, propane distribution, intrastate pipelines 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 computer market.

The following is a "Safe-Harbor" statement under the Private Securities Litigation Reform Act of 1995. This release contains forward-looking statements that involve risks and uncertainties. Statements that are not historic facts, including statements about the Company's outlook, beliefs, plans, goals and expectations, are forward-looking statements. Factors that may impact forward-looking statements include, but are not limited to, the effects of weather, the economic climate, competition, commodity prices, changing conditions in the capital markets, regulatory approval processes, success in obtaining new business and other risks detailed from time to time in the company's Securities and Exchange Commission filings.


"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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