October 9, 2007

The Michigan Public Service Commission (MPSC) today approved a settlement agreement reconciling Ontonagon County Rural Electrification Association's power supply costs for the 24-month period ended Dec. 31, 2006 and its 2006 times interest earned ratio (TIER) ratemaking mechanism.

The settlement found that the utility experienced a total under-recovery of $315,264 during 2005 and 2006, plus a remaining under-recovery from 2003 and 2004.

The utility is authorized to continue to collect the $315,264 under-recovery by applying a surcharge of 3.6 mills per kilowatt-hour until that amount is collected.

In addition, the utility is authorized to increase its revenues, as part of its TIER ratemaking, by $292,004.

The average residential customer using 500 kilowatt-hours (kWh) per month will see an increase of approximately $5.54 for the TIER ratemaking component, or 6.36 percent increase per month.

The utility and the Commission staff participated in the proceedings.

Ontonagon County Rural Electrification Association filed an application dealing with these matters on April 25.

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

Case No. U-14713-R