PORT HURON, Mich., Nov. 19 /PRNewswire-FirstCall/ -- SEMCO ENERGY GAS
COMPANY today announced that it filed a rate case with the Battle Creek City
Commission on November 15, 2004, seeking a $5 million increase in base rates.
Base rates recover the costs of serving customers, including investments in
gas distribution equipment and other business expenses such as health care,
insurance and regulation compliance costs.
The new base rates are proposed to take effect during the April 2005
billing cycle, and would be the first change in these rates for Battle Creek
customers since 1995. If approved, the average residential customer would see
an increase of approximately $8.29 per month.
The Gas Company also recommended that the Commission approve an index-
based price for the natural gas commodity portion of the bill beginning April
2005. Battle Creek is currently under a second consecutive three-year gas
price freeze that has saved customers nearly $60 million. Battle Creek
customers will continue to pay $4.71 a dekatherm for natural gas through the
winter heating season, until the current freeze expires in March 2005. At
that time, SEMCO has proposed that Battle Creek customers pay a Gas Cost
Recovery (GCR) rate based on the market price of natural gas until a favorable
price might become available for a future frozen commodity rate plan. SEMCO
ENERGY GAS COMPANY does not make a profit on the natural gas costs paid by
customers under this type of index-based rate program.
Eugene N. Dubay, Senior Vice President and Chief Operating Officer of
SEMCO ENERGY GAS COMPANY, acknowledged that the rate requests could cause
concern for some Battle Creek customers.
"We recognize that Battle Creek customers may be concerned by these rate
adjustment requests, especially after enjoying almost six years of frozen gas
rates and 10 years without a base rate increase. Actually, it is the success
of the rate freeze program that makes the rate increase request seem larger
than it actually is. The fact is that we do not control the cost of buying
natural gas on the market and, like most businesses, we have experienced
increases in the costs of doing business during the past decade. We expect,
and welcome, a thorough review by the Commission during this process."
SEMCO ENERGY GAS COMPANY serves approximately 37,000 residential,
commercial and industrial customers in the Battle Creek service territory.
Battle Creek is a Home Rule community, which means utility rates are currently
approved by the City Commission, not by the Michigan Public Service
SEMCO ENERGY, Inc. (NYSE: SEN) distributes natural gas to more than
392,000 customers combined in Michigan, as SEMCO ENERGY GAS COMPANY, and in
Alaska, as ENSTAR Natural Gas Company. It also owns and operates businesses
involved in propane distribution, intrastate pipelines and natural gas storage
in various regions of the United States.
SOURCE SEMCO ENERGY GAS COMPANY
/CONTACT: Analysts Contact: Thomas Connelly, Director of Investor
Relations, +1-248-702-6240, or Media Contact: Timothy Lubbers, Director of
Marketing & Corporate Communications, +1-810-966-4208, both of SEMCO ENERGY,
/Web site: http://www.semcoenergy.com /
CO: SEMCO ENERGY GAS COMPANY; SEMCO ENERGY, Inc.; Battle Creek City
IN: OIL UTI
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3962 11/19/2004 16:40 EST http://www.prnewswire.com