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UTILITY CUSTOMER GROUP COMMENTS ON CONSUMERS POWER'S ELECTRIC RATE INCREASE

 LANSING, Mich., Jan. 11 /PRNewswire/ -- The following was released by The Association of Businesses Advocating Tariff Equity (ABATE):
 Consumers Power Company began the new year by giving itself a $145 million annual electric rate increase before the Michigan Public Service Commission (MPSC) could complete hearings or rule on the request, a move which utility customer groups, including the Association of Businesses Advocating Tariff Equity (ABATE), claim is illegal and unreasonable.
 The $145 million rate increase is being applied to customers' bills beginning in January as an increase in the power supply cost recovery (PSCR) factor. Consumers Power estimated that the increase would amount to 6 percent, but industrial companies, some of the state's largest employers, report their bills could go up 10 percent or more.
 "The very rate factor that Consumers is implementing was thrown out of this case as improper and includes items which are illegal for the MPSC to approve," said ABATE Chairman Joseph Dudak, who is director of energy for National Steel. "The self-implemented rate increase is unreasonable and unlawful and should have been stopped by the MPSC the minute it learned about it."
 ABATE asked the MPSC to stop the surcharge immediately in a pleading filed last Thursday, Dudak said.
 The MPSC was expected to establish temporary factors for 1993, as it usually does at year end, for each of the electric utilities.
 At its Dec. 22, 1992, meeting, the MPSC set temporary rate factors for many of the state's other electric utilities, but Consumers asked the MPSC to delay its ruling on temporary rate factors for Consumers. When the MPSC complied, Consumers went ahead and put the $145 million increase into effect. Self-implementing rates is allowed in some circumstances under state law, but not in this instance.
 The new rates being implemented by Consumers Power are pending approval in ongoing proceedings before the MPSC. These proceedings, to be completed in March, will determine how much Consumers can charge for power from the Midland cogeneration plant. All of the customer groups participating in the proceedings have opposed the proposed rates. Several other utilities also oppose the rates based on the fact that cheaper power is available.
 "Consumers' unilateral New Year's action grants itself immediately the full $145 million it hopes will be approved in March. The MPSC needs to thoroughly review these rates and determine if they are reasonable," said Dudak.
 "This is like a big tax increase on Michigan companies at a time when they are struggling to preserve jobs and create an economic recovery," said Dudak.
 Consumers Power had told the commission that customers would be protected if the commission did not set temporary rates, because if Consumers' self-implemented rate hike was later thrown out, customers would get a refund.
 "This kind of thinking ignores business realities. Consumers' customers will be forced to spend money and time at the MPSC and the courts to get back money which shouldn't have been charged in the first place," said Dudak. "The MPSC has failed to act to protect Consumers Power's customers. The commission can and should act immediately to stop this improper charge from continuing."
 ABATE is a non-profit association of 27 major Michigan industrial companies working to make the state's energy costs competitive. ABATE's member companies operate more than 130 facilities in 40 counties and employ more than 300,000 people in Michigan.
 -0- 1/11/93
 /CONTACT: Roderick Coy, attorney for ABATE, 517-484-4481/
 (CMS)


CO: Association of Businesses Advocating Tariff Equity;
 Consumers Power Company ST: Michigan IN: UTI SU:


ML -- DE012 -- 3472 01/11/93 10:42 EST
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Date:Jan 11, 1993
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