PORT HURON, Mich., Feb 17, 2005 /PRNewswire-FirstCall via COMTEX/ -- SEMCO ENERGY, Inc.
(NYSE: SEN) today announced that SEMCO ENERGY GAS COMPANY has received final
approval from the Battle Creek City Commission to implement a negotiated
three-year adjustment in base rates.
The base rate adjustment, negotiated in January with City officials and
approved by the City Commission after public hearings, is expected to generate
$3.55 million, $3.7 million and $3.85 million in additional revenue for the
Company, respectively, over the next three years. Base rates recoup costs
incurred by the Company to maintain its natural gas distribution
infrastructure and cover expenses such as employee health care, property
insurance and regulatory compliance. This is the first base rate adjustment
for Battle Creek area customers since 1995. Residential customers will see a
$4 increase in the Customer Charge to $11 a month. The adjusted rates go into
effect with the April billing cycle, which will apply the new rates to gas
consumed in March for some customers.
Battle Creek customers also will return to index-based natural gas
commodity pricing after a current three-year price freeze expires March 31,
2005. Index-based pricing charges customers the market cost of the natural
gas commodity they consume. A frozen rate guarantees a locked-in rate
regardless of market fluctuations. Battle Creek residents saved an average
$544 per household on natural gas costs since 2002 under the frozen rate that
expires March 31. Current market conditions make another frozen rate program
unattractive at this time. SEMCO ENERGY GAS COMPANY and Battle Creek
officials have agreed to consider a frozen rate program if market conditions
become favorable in the future.
SEMCO ENERGY GAS COMPANY serves approximately 37,000 residential,
commercial and industrial customers in its Battle Creek service territory.
Battle Creek is a Home Rule community, which means utility rates are currently
approved by the Battle Creek City Commission, not the Michigan Public Service
SEMCO ENERGY, Inc. 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.
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, success in defending claims against the
Company, and other risks detailed from time to time in the Company's
Securities and Exchange Commission filings.
SOURCE SEMCO ENERGY, Inc.
Analysts Contact: Thomas Connelly, Director of Investor Relations, +1-248-458-6163,
Media Contact: Timothy Lubbers, Director of Marketing & Corporate Communications
+1-810-966-4208, both of SEMCO ENERGY, Inc.