Concluding that the action was both “reasonable and in thepublic interest,” the Michigan Public Service Commission last weekapproved a request by Michigan Gas Utilities for a special gastransportation contract with Rock-Tenn Paperboard Products, one ofthe largest accounts on MGU’s system.

The Rock-Tenn facility currently takes service under MGU’s TR-3transportation tariff to satisfy its annual load of approximately800,000 Mcf at its plant in Otsego, MI. MGU said Rock-Tenn had abypass study prepared for the Otsego plant indicating that bypasswas a viable alternative. Because of the competitive alternative,MGU entered into a special contract with Rock-Tenn covering boththe existing plant and a proposed new facility.

Except for the rates, MGU said that the terms of the contractwere materially the same as those provided in its tariffs and thatthe contract was a product of “good faith negotiations thatincluded consideration of existing and future competitive optionsavailable to Rock-Tenn.” The rates were not publicly disclosed.

The commission determined that MGU “should have leeway” tonegotiate prices and other terms “as it sees fit,” unless thecontract violated statutes, rules or orders or harmed otherratepayers, and the contract did not appear to do that.

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