December 6, 2002

The Michigan Public Service Commission today approved an interim settlement agreement and authorized Aquila-MGU to increase its annual gas revenues by $8,243,647.  Today's order authorizes the company to apply an interim surcharge on all its natural gas customers' bills, for service effective December 7, 2002.  The Commission approved the interim settlement because Aquila's current rates could result in a revenue deficiency for the company.  Aquila filed an application on August 2, 2002 seeking authority to increase its rates for the transportation and distribution of natural gas by $14,283,246 annually, and at the same time, requested partial and immediate rate relief of $9,281,000 annually.  The settled amount reflects MPSC staff's recommended disallowance of $1,037,353 due to a change in the Single Business Tax rate and exclusion of special discounts from revenue requirements.  The interim surcharge will be collected under bond and subject to refund at the time of the Commission's final order.

Aquila's residential customers using 120 Mcf (thousand cubic feet) of natural gas per year will see an increase of about $3.82 on their monthly natural gas bills, effective December 7, 2002.  Individual customer increases will vary, based on actual customer natural gas use.   All classes of sales customers will also see an increase, which will vary, based on actual natural gas use.

MPSC staff, Aquila, Attorney General Jennifer Granholm, and Wolverine Power Supply participated in the interim proceeding.

Aquila-MGU, headquartered in Monroe, provides natural gas service to about  155,000 customers in Michigan.

The MPSC is an agency within the Department of Consumer and Industry Services.


Case No. U-13470