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CMS PRESIDENT CITES COMPETITIVE CHANGES IN ELECTRIC INDUSTRY

 HOUSTON, Feb. 11 /PRNewswire/ -- Electric industry executives who ignore the lessons taught from greater competition in the U.S. natural gas industry over the past 10 years will see their companies suffer in the future, the president of CMS Energy Corporation (NYSE: CMS) predicted.
 Speaking at an international symposium on energy issues, Victor J. Fryling said the competitive changes now occurring in the electric industry are nearly identical to those in the natural gas industry beginning in the late 1970s.
 "Many (gas) pipeline executives didn't believe changes would happen, refused to prepare for them and saw their companies suffer," Fryling said. "Those who foresaw the changes and did prepare for them have prospered."
 The winners from the greater competition in the natural gas industry are consumers, Fryling said, because today the utilities who serve them have a greater choice about from whom to buy gas supply as well as how much to pay for it. This translates into the lowest possible price for customers, he said.
 Greater competition in the electric industry will produce the same benefits for consumers, Fryling said.
 The 1992 federal energy legislation will enhance the growth of increased transportation options for wholesale electricity and allow electric utilities to better shop around for the lowest possible electricity price for their customers, Fryling said.
 "The result should be a much more efficient market place, greater competition and the eventual possibility of large consumers purchasing their power needs directly from power generators," Fryling said.
 He noted, however, that there still exists, "the same kind of resistance and denial by many major U.S. power companies to this new process that occurred in the pipeline business."
 Fryling said this resistance often takes the form of hostile business strategies by some utilities toward independent power producers which, for example, places onerous conditions in power contracts or insists upon terms that cannot be met.
 "But in the end, they (these utilities) will lose," Fryling said. "Change will occur, just like it did in the pipeline industry."
 Fryling, who also serves as vice chairman of CMS Energy's principal subsidiary, Consumers Power Company, the nation's fourth-largest gas and electric utility, said the utility will prosper under the new more competitive conditions, and will continue to work closely with states and federal regulators to implement changes brought about by these new conditions.
 At the same time, Fryling said, another CMS Energy affiliate, the CMS Generation Co., already the nation's fourth-largest independent power company, having developed facilities representing 1,550 megawatts of electric generating capacity, will continue to pursue new opportunities for independent power plant development.
 He noted that the U.S. Department of Energy, for example, forecasts a national need for 105,000 MW of additional electricity for the country from now through the year 2000 -- the equivalent of 100 new 1,000 MW plants. Over 50 percent of new U.S. generating capacity added in recent years has come from non-utility power producers, Fryling noted, adding that he believes independent producers will account for more than 50 percent of additional needs between now and the year 2000.
 The need for additional power on a global scale is even greater, Fryling added. A McGraw-Hill publication estimates that worldwide 42 governments have identified the need for a total of 244,000 new megawatts of capacity.
 CMS Energy Corporation is a $3 billion (sales) diversified energy company with businesses engaged in the distribution of electricity and natural gas, interstate storage and transmission of natural gas, oil and gas exploration and production, independent power generation and utility services. CMS Energy Corporation's principal subsidiary is Consumers Power Company, Michigan's largest utility and the nation's fourth- largest combination electric and gas utility.
 Consumers Power Company, the principal subsidiary of CMS Energy Corporation, is Michigan's largest utility, serving almost 6 million of the state's 9 million residents in 67 of the 68 Lower Peninsula counties.
 -0- 2/11/93
 /CONTACT: Michael J. Brogan of CMS Energy Corporation, 313-436-9253/
 (CMS)


CO: CMS Energy Corporation ST: Michigan, Texas IN: UTI SU:

DH -- DE027 -- 5768 02/11/93 14:03 EST
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Date:Feb 11, 1993
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