PORT HURON, Mich., Jan. 10 /PRNewswire-FirstCall/ -- SEMCO ENERGY, Inc.
(NYSE: SEN) announced today that the Michigan Public Service Commission (MPSC)
has approved the SEMCO ENERGY GAS COMPANY division base rate case settlement.
The new rates will be effective on and after January 10, 2007.
Under the settlement, revised base rates, which are intended to recover
the Company's non-gas costs of providing service, are estimated to produce
total annual revenues of approximately $90.5 million. This total annual
revenue figure includes an estimated increase in annual base rate revenues of
approximately $12.65 million based on adjusted 2005 test year data. However,
the Company expects that, based on the Company's current projections for 2007
residential use per customer, the revised rates would result in an increase of
approximately $10.55 million in annualized base rate revenue for the Company.
The Company had requested an $18.90 million increase in base rate revenues.
A typical residential customer will see an estimated increase of $3.37 a month
as a result of this decision. The MPSC action does not include changes in the
cost of natural gas. The cost of natural gas, which fluctuates with changes
in market prices, is passed through to customers at cost and does not generate
profits for the Company.
Some requests the Company included in the initial rate case filing are not
part of the settlement, including proposals that would have changed the method
for collecting certain expenses and the funding of customer conservation
programs. The settlement does address a continuing decline in residential
customer consumption by changing a key billing element included in rates. As
part of the settlement, the Company also agreed not to file for base rate
increases for MPSC Division customers until after January 1, 2008.
"Although this settlement does not include the innovative rate design and
the associated conservation plan that the Company originally proposed, it does
recognize that residential customer consumption has been steadily declining.
To address this situation, the MPSC included an adjustment to the monthly
customer charge and a move toward market realities by significantly reducing
the billing determinant. We were hopeful that the Commission would have
adopted more of our proposed rate design changes because we firmly believe
that they are a more balanced approach to collecting our fixed costs. We
continue to experience significant changes in our business and, therefore, I
fully expect that we will once again focus the MPSC on needed rate design
improvements in our next rate case filing," said Eugene N. Dubay, Chief
Operating Officer of SEMCO ENERGY GAS COMPANY.
For more detailed information on specific rate changes approved by the
MPSC, visit the SEMCO ENERGY GAS COMPANY web site: www.semcoenergygas.com.
SEMCO ENERGY, Inc. distributes natural gas to more than 400,000 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.
CONTACT: Analysts, Thomas Connelly, Assistant Treasurer & Director of
Investor Relations, +1-248-458-6163, or Media, Timothy Lubbers,
Director of Marketing & Corporate Communications, +1-810-887-4208, both of
SEMCO ENERGY, Inc.
6308 01/10/2007 08:13 EST http://www.prnewswire.com