October 6, 2005

Noting the dramatic increase in the cost of natural gas, the Michigan Public Service Commission (MPSC) today issued orders expediting contested cases dealing with revising the gas cost recovery (GCR) factors for Aquila Networks -MGU, Michigan Consolidated Gas Company, SEMCO Energy Gas Company, Consumers Energy Company, and Xcel Energy.  In each case, a Nov. 21 deadline has been set for the

cases to be submitted directly to the Commission.

In Case No. U-14400, Aquila Networks – MGU on Sept. 30 filed an application with the MPSC seeking authority to revise the remaining six months of its 2005-2006 GCR plan and factors.  The MPSC on Sept. 20 approved a settlement agreement that authorized the company to implement a base GCR factor of $8.002 per thousand cubic feet (Mcf) subject to a contingent adjustment mechanism of up to $1.959 per Mcf, which would allow the company to charge a maximum GCR factor of up to $9.961 per Mcf during the 12-month period ending March 31, 2006.  Because of higher natural gas prices, Aquila now estimates an under-recovery of $27.4 million. 

In Case No. U-14401, Michigan Consolidated Gas Company on Dec. 22, 2004 filed an application for approval of its GCR plan and factors for the 12-month period ending March 31, 2006.  The Commission has not yet issued a final order in this case.

On Sept. 30, the company filed an application to reopen the case, estimating an under-recovery of $235 million through March 31, 2006.

In Case No. U-14402, the Commission on Sept. 20 approved a settlement agreement that authorized SEMCO Energy Gas Company to implement a base GCR factor of $7.9055 per Mcf subject to a quarterly contingent adjustment mechanism.  On Oct. 4, SEMCO filed an application seeking authority to revise the remaining six months of its 2005-2006 GCR plan and factors, estimating an under-recovery of $67.6 million.

In Case No. U-14403, Consumers Energy Company on Dec. 29, 2004 filed an application requesting approval of its GCR plan and factors for the 12-month period ending March 31, 2006.  The Commission has not yet issued a final order in this case.  On Sept. 30, Consumers Energy filed an application to reopen this case, estimating an under-recovery of $100 million through March 31, 2006.

In Case No. U-14404, the Commission on April 28, 2005 approved a settlement agreement that authorized Xcel Energy to incorporate in its rates a uniform GCR factor of $0.86760 per therm for the billing months of April 2005 through March 2006.  The company was also authorized to adjust its GCR factors quarterly according to the GCR ceiling price adjustment set in the settlement agreement.  On Sept. 30, Xcel filed an application seeking authority to revise the remaining six months of its 2005-2006 GCR plan and factors, estimating an under-recovery of $1.6 million.

The MPSC is an agency within the Department of Labor & Economic Growth.

Cases Nos. U-14400 through U-14404