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SENIOR CONSUMERS POWER OFFICIAL TESTIFIES AGAINST ENERGY TAX

 LANSING, Mich., Feb. 24 /PRNewswire/ -- The Administration's proposed new energy taxes will raise energy bills on Michigan's residential and small commercial energy users by as much as $1 billion a year and work a true hardship on moderate and fixed-income families who are least able to pay such taxes, a senior Consumers Power Company officer testified before the State Senate Technology and Energy Committee in support of a resolution to the U.S. Congress opposing new energy taxes.
 "An energy cost increase of this magnitude typically generates great concern in Lansing and our state political leadership needs to reflect this same kind of concern in letting Washington know about the harm these new energy taxes will do to Michigan," said Consumers Power Senior Vice President John W. Clark.
 "These new energy taxes would hurt Michigan more than other states since it is the eighth largest energy consuming state," said Clark. "Michigan also is the nation's fourth leading exporter and our international competitiveness would be hurt by these new taxes," said Clark. Many Michigan industries will be negatively impacted, he noted, due to the higher cost of processing and production expenses from new energy taxes. These businesses include those involved in manufacturing, agriculture, transportation sector, pharmaceuticals, chemicals and tourism. Clark noted that these industries have been the principal source of Michigan's job creation and economic growth.
 "Our overseas competitors have rejected energy taxes, other than gasoline, in order to not harm their international competitiveness. We should learn from their example," Clark said.
 Taxes on fuel for electric generation, natural gas for heating, expense for transportation gas to large commercial and industrial customers, and purchased electric generation from independent power producers will cost Consumers Power customers an estimated $200 million in 1997, said Clark. Actual expenses could be higher, he noted, due to indexing of taxes for inflation.
 In addition to the direct tax impact of the proposal, the ripple effect of higher energy taxes will also increase rates charged by electric and gas utilities, said Clark. These expenses, such as gasoline for company vehicles and fuel for heat and processing in facilities, will be reflected in the total cost of delivered utility service, Clark said.
 "Energy taxes are politically attractive revenue options because, unlike gasoline and a general retail consumption tax, they are 'hidden taxes,'" said Clark. "Such taxes are levied on utilities, other energy producers and manufacturers and not directly on individual taxpayers. Of course, the cost of the taxes are ultimately passed on to consumers in the increased price of the product or service but any consumer resentment is directed at the utility or manufacturer versus the politician who levied the tax," Clark said.
 Clark noted that "energy taxes are regressive and will have a more severe financial impact on lower income residents. The top 20 percent of household wage earners pay only about 5 percent of their incomes for energy costs, while the lowest 20 percent pay over 20 percent for the same energy," Clark said.
 Consumers Power Company, the principal subsidiary of CMS Energy Corporation (NYSE: CMS), is Michigan's largest natural gas and electric utility serving almost 6 million of the state's 9 million residents in 67 of the 68 Lower Peninsula counties.
 -0- 2/24/93
 /CONTACT: Charles E. MacInnis, News and Information, Consumers Power Company, 517-788-0333/
 (CMS)


CO: Consumers Power Company ST: Michigan IN: UTI OIL SU:

JG -- DE031 -- 0115 02/24/93 17:25 EST
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Publication:PR Newswire
Date:Feb 24, 1993
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