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SEMCO ENERGY GAS COMPANY Encourages Customers to Use Budget Billing and Conservation to Combat Rising Natural Gas Prices

PORT HURON, Mich., Sept. 29 /PRNewswire/ -- SEMCO ENERGY GAS COMPANY would like customers to use a two-pronged strategy to respond to rising natural gas prices as the 2005-2006 heating season approaches.

Customers are encouraged to take advantage of SEMCO ENERGY's Flex Budget Payment Plan where they can spread their monthly natural gas bill payments over a 12-month period. Customers are also urged to utilize energy conservation measures to reduce their energy use, which will lower their heating bills.

"Indications are that, especially in the immediate aftermath of Hurricanes Katrina and Rita, natural gas prices will continue to climb," said Timothy J. Lubbers, SEMCO ENERGY Director of Marketing and Corporate Communications. "We are encouraging our customers to take steps to minimize the impact of the projected gas cost increases by enrolling in the budget payment plan and by conserving."

"While the Flex Budget Payment Plan cannot reduce the price of natural gas that we all face this winter, it spreads bill payments over a 12-month period, and lessens the impact of high monthly bills during peak winter usage," Lubbers said.

SEMCO ENERGY buys natural gas and passes those costs through to customers with no profit component. The utility earns money by distributing natural gas to its customers. The amount SEMCO ENERGY may charge its Michigan customers is regulated by the Michigan Public Service Commission and the City Commission of Battle Creek.

The Flex Budget Payment Plan uses a customer's natural gas consumption history in combination with projected natural gas prices to estimate the customer's bill for the coming year. That projected bill is then spread over a 12-month period and billed in equal monthly installments. The customer's bill is reconciled -- meaning that the amount paid is compared to the actual amount due and the difference is added to the bill or credited to the customer -- in the 12th month. The Flex Budget Payment Plan amount may be adjusted during the year to reflect larger than expected variations in natural gas prices and customer usage. This adjustment is designed to avoid a significant "true up" charge at the end of the plan period. Customers may enroll in the Flex Budget Payment Plan at any time during the year. Enrollment information is available on the Gas Company web site: and by calling the Customer Service Department at 1-800-624-2019.

SEMCO ENERGY GAS COMPANY is also strongly urging customers to use conservation methods to facilitate more efficient energy usage during the upcoming heating season. Simple steps, such as sealing windows and unused doors and adding a layer of insulation, in addition to dialing down the thermostat, can have a significant impact on energy usage.

"Making their homes more energy efficient is one way customers can counter the increasing cost of natural gas this year," Lubbers said.

Customers can consult the SEMCO ENERGY GAS COMPANY web site ( ) for tips on energy saving measures. The site also offers a link to the U.S. Department of Energy "Energy Savers" web page.

"If conserving or taking advantage of budgeting billing options aren't enough, SEMCO ENERGY GAS COMPANY is willing to work with customers who find it difficult to pay their bills during the winter heating season," Lubbers added. "We recognize that energy costs payments, including the cost of natural gas, are taking a larger portion of our customers' incomes. We have a variety of ways to help people with their payments," Lubbers said.

If customers are going to be unable to pay their full monthly bills, they should contact SEMCO ENERGY at 1-800-624-2019 before their payments are due. A payment plan can be set up for them.

"We don't want to shut off any customers' service at any time of the year. It is important that they contact us before the situation gets to that point," Lubbers said.

SEMCO ENERGY GAS COMPANY also is inviting customers to donate to The Heating And Warmth (THAW) Fund. SEMCO ENERGY's September customer news letter, Connectivity, included a coupon for making tax-deductible THAW Fund donations. SEMCO ENERGY GAS COMPANY will match donations to the THAW Fund by our customers.

Lubbers commented: "Despite efforts to conserve and to pay their bills on time, some customers may face bills that are simply beyond their means. If you are able, making a donation to organizations such as THAW is a good way to help our neighbors who need assistance. It is especially important this year when we know that, because of high market prices, energy bills are going to be much higher this winter, even if usage does not change."

SEMCO ENERGY, Inc. (NYSE: SEN) distributes natural gas to more than 404,000 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.


CONTACT: Analysts Contact: Thomas Connelly, Director of Treasury & Investor Relations, Phone: 1-248-458-6163, or Media Contact: Timothy Lubbers, Director of Marketing & Corporate Communications, Phone: 1-810-887-4208, both of SEMCO ENERGY, Inc.

3705 09/29/2005 11:21 EDT

"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.