To resolve concerns raised by the Federal Trade Commission overthe proposed merger of DTE Energy and MCN Energy, MCN has agreed totransfer a property interest to a unit of Unicom Corp. that wouldallow for the use of up to 20 Bcf of natural gas transportationcapacity annually on MCN’s Michigan Consolidated Gas Co. system inthe relevant distribution area.

DTE and MCN, both based in Michigan, announced the proposalyesterday to address FTC’s related review of the companies’ proposedmerger, which was first announced in October 1999 (see Daily GPI, Oct. 6, 1999). FTC staff is now reviewingthe impact of the proposal. If approved, DTE would become the largestenergy utility in Michigan.

DTE’s principal operating subsidiary is Detroit Edison, whichserves more than 2.1 million customers in the southeastern part ofthe state. MCN’s largest subsidiary is MichCon, serving 1.2 millioncustomers in more than 500 communities in the state.

FTC staff is concerned about the possible loss of competitionbetween DTE’s Detroit Edison and MCN’s MichCon utility subsidiariesin their coincident retail distribution areas. The agreement isstill subject to regulatory approval. DTE and MCN began discussionswith FTC staff last November as part of the agency’s review of themerger under the Hart-Scott-Rodino Act.

Unicom currently markets natural gas to customers in the Detroitarea and has initiatives under way to participate as demand fordistributed generation technologies develop in the state.

Anthony F. Earley Jr., CEO of DTE, said he believes that the newproposal should suit FTC concerns. “While we can’t predict thetiming or outcome of FTC’s investigation, it remains our objectiveto close this merger in the fourth quarter.”

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