December 13, 2019
LANSING – As part of her continued commitment to rate payers, Michigan Attorney General Dana Nessel commended a settlement approved late last week by the Michigan Public Service Commission regarding SEMCO Energy Gas Company’s May 31 application seeking a natural gas rate increase.
In their application, SEMCO sought a $38 million rate increase or 14% increase in monthly bills for residential customers, a 10.5% return on equity, and an increase in the monthly customer charge by more than $5.00 for residential customers.
Nessel worked with Citizens Utilities Board, along with other parties in the case to negotiate a 50% reduction to SEMCO’s rate increase request, reducing the 14% increase to 7% for residential customers. In addition, SEMCO agreed not to file another rate increase request until January 1, 2023. SEMCO also agreed to a return on equity of 9.87% which should help reduce the cost of capital projects for customers.
Finally, as part of this settlement, SEMCO is expanding two low-income programs that will provide a $30 monthly credit and a $12.25 monthly credit to qualifying customers. Both programs are based on household income levels, but the additional $30 credit will be available to customers with the highest energy burden.
“Cutting the requested rate increase by half, preventing future rate increases for three years, and expanding low-income programs should help customers keep their houses warm this winter,” said Nessel. “I am happy to see the company put together a robust low-income program and excited to give customers a three-year break on any future rate increases.”
“Attorney General Nessel’s persistent and effective efforts to protect all ratepayers were crucial to our success in cutting the proposed rate increase on residential customers in half,” said Amy Bandyk, Executive Director of the Citizens Utility Board of Michigan, an independent, nonpartisan, nonprofit organization. “We're pleased our joint effort resulted in an increase in programs available to low-income residents from an originally-proposed 3200 to now include more than 12,000 SEMCO customers. Low-income customers participating in these programs will see an average rate decrease between $6.67 and $24.42 per month.”
SEMCO serves approximately 300,000 customers located in both the southern half of the Lower Peninsula (including in and around the cities of Albion, Battle Creek, Holland, Niles, Port Huron, and Three Rivers) and in the central, eastern, and western parts of the Upper Peninsula (including in and around the cities of St. Ignace, Newberry, Manistique, Marquette, and Houghton).