Meeting at Michigan Tech, regulators give SEMCO a $33 million gas rate increase, about half what it asked

HOUGHTON, Mich. — The Michigan Public Service Commission held its Oct. 15 meeting on the Michigan Technological University campus and, while in town, approved a natural gas rate increase that U.P. customers of SEMCO Energy Gas Co. will see on January bills.

The commission approved a settlement giving SEMCO a $33 million increase, a reduction of more than 46% from the $61,251,191 the company first requested (Case No. U-22002). SEMCO serves about 300,000 customers in the Upper Peninsula and the southern Lower Peninsula.

Your bill. A typical residential customer using 10 dekatherms a month will pay $2.80 more, or 3.16%, starting Jan. 1, 2027. A separate infrastructure surcharge adds 19 cents a month on Jan. 1 and rises each year, reaching a total of $2.17 more per month by Jan. 1, 2031, the commission said.

What it pays for. SEMCO said capital investment and related costs made up 97% of its request, including the Keweenaw Connector Pipeline in the western U.P., built to add redundancy to the region’s gas system. The rates also fund replacing about 37 miles a year of older plastic and steel main from 2027 through 2031.

The settlement sets SEMCO’s return on equity at 9.85%, below the 10.75% it sought. The state attorney general’s office, commission staff and business and energy-supplier groups all signed it.

Our view. Cutting the request nearly in half is real work by the regulators and the attorney general, and a second pipeline into the Keweenaw is worth having before the next January cold snap. Still, a surcharge that ratchets up every year for five years deserves annual scrutiny, not autopilot.

Sources:
Michigan Public Service Commission, “MPSC approves continued pipeline upgrades, infrastructure investments for SEMCO Energy Gas Co.,” news release, Oct. 15, 2026 (meeting location, amounts, bill impacts, surcharge, ROE, parties), https://www.michigan.gov/mpsc/commission/news-releases/2026/10/15/mpsc-approves-continued-pipeline-upgrades-infrastructure-investments-for-semco-energy-gas-co
Photo: Tony Webster, “Natural Gas Meter.jpg,” Wikimedia Commons, CC BY 2.0 (https://creativecommons.org/licenses/by/2.0/), cropped and color-adjusted, https://commons.wikimedia.org/wiki/File:Natural_Gas_Meter.jpg

Houghton

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