December 21, 2006

The Michigan Public Service Commission (MPSC) today approved a surcharge for Michigan Consolidated Gas Company, beginning on Jan. 1, 2007. The surcharge reflects the utility's uncollectibles expenses.

In the utility's April 28, 2005 gas rate case, the MPSC approved the implementation of an uncollectibles expense true-up mechanism (UETM), recognizing the unpredictability of uncollectible expenses actually experienced by the utility. To protect customers, the Commission adopted a mechanism that provides an incentive for the utility to keep uncollectibles as low as possible by allowing only 90 percent recovery.

The annual amount of uncollectibles expense was set at $37.3 million, while also directing the company to file an annual report on its actual level of uncollectibles in the previous calendar year. To provide the utility with an incentive to minimize its uncollectibles expense, the Commission set the UETM at 90 percent of the difference between the $37.3 million and the amount of the uncollectibles actually experienced.

The average residential Michigan Consolidated Gas Company customer using 100 Ccf (hundred cubic feet) per month will see a monthly surcharge of 55 cents.

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

Case No. U-13898