November 9, 2006

The Michigan Public Service Commission (MPSC) today issued an order approving a settlement agreement that authorizes Consumers Energy Company to sell all of its interests in the Midland Cogeneration Venture Limited Partnership (MCV) facility to MCV Power Partners, Inc., an unaffiliated entity.

On July 26 the utility sought the Commission's ex parte approval for the sale. The Commission instead initiated an expedited, contested case, as required by its previous orders (Case Nos. U-7830 and U-9611). The MPSC noted that the proceeding would determine whether the transfer would be accomplished in a manner that protects customers.

The settlement agreement approved today authorizes Consumers Energy Company to consummate the transaction described in its stock purchase agreement; file a report indicating the amount of net proceeds realized from the transaction; and file additional reports describing the manner in which the net proceeds are used, including the amount and type of debt that is reduced or eliminated, as well as the date of reduction. Customer rates will not change as a result of this order.

The settlement agreement also requires Consumers Energy Company to file, no later than May 1, 2007, an amendment to its 2007 power supply cost recovery plan in Case No. U-15001 that addresses various issues related to the power purchase agreement (PPA) between Consumers Energy and the MCV. The utility is the purchaser of 1240 Megawatts of capacity and associated energy from the MCV pursuant to a PPA.

Dow Corning Corporation, the MCV, and the Attorney General participated in this settlement.

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

Case No. U-14981