The Michigan Public Service Commission has approved orders forDearborn, MI-based CMS Energy Corp. that authorize securitizationof $469 million in stranded electric utility costs, expand the gascustomer choice program and authorize accounting changes tomitigate future increases in the cost of natural gas.

“These orders on electric and natural gas utility issuesrepresent the final major steps in electric and natural gasrestructuring for Consumers Energy and remove the last significantregulatory uncertainties affecting Consumer Energy’s gas andelectric utility businesses,” said CMS CEO William T. McCormick Jr.

Under MPSC’s orders, CMS Energy’s principal subsidiary,Consumers Energy, may proceed with the sale of bonds under thestate’s Consumer Choice and Electricity Reliability Act of 2000,which allows the company to offset, on a prospective basis, theearnings impact of a 5% residential electric rate reduction putinto effect in June. CMS said that it expects to issue the bonds bythe end of the year.

Consumers Energy’s gas customer choice program, which beginsApril 1, 2001, also will be expanded, re-establishing a gas costrecovery mechanism under which the utility may recover increasednatural gas commodity costs.

MPCS also will allow Consumers Energy to reclassify recoverable,low-cost base gas in the company’s gas storage reservoirs asworking gas, which will allow the company to immediately begin toaverage the gas with higher cost purchased gas. The gas accountingorder eliminates the need for the company to recognize any furtherlosses.

Under an expanded choice program, up to 600,000 Consumers Energycustomers will be eligible to participate, with up to 900,000customers expected by April 1, 2002. All 1.6 million gas customerswould be eligible to select an alternate natural gas supplierbeginning April 1, 2003.

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