LANSING, August 16.  The Michigan Public Service Commission
today approved a settlement agreement authorizing Michigan Gas Utilities to
implement a gas cost recovery (GCR) plan and a factor of up to $6.84 per
thousand cubic feet for the months of July through December 2001, subject to
a quarterly ceiling adjustment.  Today's order also directed the company to
change an estimating process for its GCR customer usage and increase the
amount of natural gas taken from storage and the volume of gas obtained
under fixed price contracts.    The Commission approved the settlement
agreement signed by MGU, MPSC staff, Attorney General Jennifer Granholm,
and the Residential Ratepayer Consortium.
     The settlement agreement includes a methodology MGU may use to
adjust its gas cost recovery factors to reflect market price changes.  The
methodology permits MGU to institute a quarterly adjustment, subject to a
ceiling, without first returning to the Commission for approval.
     MGU, headquartered in Monroe, provides natural gas service to about
150,000 customers in Michigan.
     The MPSC is an agency within the Department of Consumer and
Industry Services.


Case No. U-12617
August 16, 2001
(MPSC approves MGU's GCR plan and factors for July through December
2001)