After negotiating in January with Battle Creek, MI, officials and receiving final approval from the Battle Creek City Commission, Semco Energy Inc. said Thursday that its Semco Energy Gas Co. will implement its three-year adjustment in natural gas base rates.

The base rate adjustment is expected to generate $3.55 million, $3.7 million and $3.85 million in additional revenue for the company, respectively, over the next three years. The base rates recoup costs incurred from maintaining the natural gas distribution infrastructure. It also covers expenses such as employee health care, property insurance and regulatory compliance.

Semco Energy Gas noted that this is the first base rate adjustment for Battle Creek area customers since 1995. As a result of the increase, residential customers will see a $4 increase in the customer charge to $11 a month, beginning with the April billing cycle, which will apply the new rates to gas consumed in March for some customers.

After the current three-year price freeze expires March 31, Battle Creek customers also will return to index-based natural gas commodity pricing. Semco Energy Gas said that Battle Creek residents saved an average $544 per household on natural gas costs since 2002 under the frozen rates, noting that current market conditions make another frozen rate program “unattractive at this time.”

In the negotiations with Battle Creek officials, Semco Energy Gas said it has agreed to consider a frozen rate program if market conditions become favorable in the future. The company serves approximately 37,000 residential, commercial and industrial customers in its Battle Creek service territory.

Semco Energy distributes natural gas to more than 392,000 customers combined in Michigan, as Semco Energy Gas, and in Alaska, as ENSTAR Natural Gas Co.

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