MPSC approves SEMCO's gas cost recovery plan and its expanded 
gas customer choice program

August 20, 2002

The Michigan Public Service Commission today advanced customer 
choice for SEMCO Energy Gas Company's natural gas customers 
by approving a settlement agreement that authorized the company 
to implement an expanded voluntary gas customer choice program, 
effective October 1, 2002.   Today's action follows a Commission 
order issued on February 25, 2002, which approved an extension of 
SEMCO's voluntary customer choice pilot program. 

Under the expanded program, all non-residential customers and up 
to 78,000 residential customers will be eligible to select an alternative 
natural gas supplier, beginning October 1, 2002.  Beginning April 1, 
2003, all non-residential and up to 117,000 residential customers 
may participate in the program, and on April 1, 2004, all SEMCO 
customers will be eligible to select an alternative supplier. 

SEMCO's expanded program, like its pilot program, is voluntary for 
its natural gas customers.  Participating customers will be selected 
on a first come, first served basis.  Today's order approves 
residential customer protections, solicitation requirements, supplier 
registration and code of conduct, and procedures for complaints 
between suppliers and the company.

The Commission order also authorized the company to implement 
its natural gas cost recovery plan, approving a gas cost factor of up 
to $3.2728 per thousand cubic feet (Mcf) for April 2002 and $3.8280 
per Mcf for May 2002 through March 2003.  The company is also 
authorized to adjust its gas cost recovery factors based on a 
contingency mechanism that reflects gas market price increases.

"SEMCO becomes the fourth local distribution company in Michigan 
to offer a permanent customer choice program for its natural gas 
customers," said Chairman Laura Chappelle.  "We are pleased to 
note that natural gas customer  choice is flourishing in Michigan, with 
nearly 344,000 natural gas customers selecting an alternative provider 
to supply their natural gas needs."
 
SEMCO, headquartered in Port Huron, provides natural gas service 
to about 216,000 Michigan customers.

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


Cases Nos. U-13305, U-13223