Integrys Energy Inc.
) operating wing Michigan Gas Utilities filed for a hike in
natural gas distribution rates with the Michigan Public Service
Commission. The company at present has one of the lowest rates
among all natural gas companies in the state.
On approval, bills of Michigan customers consuming 880 hundred
cubic feet ("CCF") of natural gas will climb by $2.34 per month,
which will still be roughly 25% below the rates charged in 2010
on account of plummeting natural gas prices. If approved, it
would lead to a 6% rate increase and would come into effect from
Jan 1, 2014.
The company intends to recuperate its costs incurred from
modernization of its transmission and distribution systems, costs
related to customer service functions, declining revenues and
general inflation on the back of the rate hike.
For the past three years, Integrys Energy maintained a tight
budget and had last requested for a distribution rate increase in
Jan 1, 2010. In the time period, the company has been busy
upgrading its various natural gas infrastructures, replacing
aging steel pipes and remodeling outdated facilities.
If sanctioned, it will help Integrys Energy to continue with
its planned $2.5 billion natural gas improvement initiatives in
the near term. Last month, the company acquired
AGL Resources Inc.
) non-regulated retail gas business for $20 million. This will
aid Integrys to expand its profitable sales and marketing
Meanwhile, the company will benefit from the expected jump in
natural gas consumption, in the U.S., across all sectors barring
the residential, as per the Energy Information
Integrys' is also looking forward to receiving a positive
response for its Wisconsin Public Service's System Modernization
and Reliability Project in the third quarter 2013. Also, its
ambitious Main Replacement program in Chicago has been
progressing at a steady pace.
Integrys' focus on rate-based investments and diligent efforts
to upgrade its service assets will certainly help in customer
retention. Currently, the company holds a Zacks Rank #2
The utilities have been filing for rate increases with
Dominion Resources Inc.
TECO Energy Inc.
) requesting for rate boosts of 2.2% and 10%, respectively.
Based in Chicago, Integrys Energy is a diversified energy
holding company, engaged in natural gas and electric utility
operations, and non-regulated energy operations in the United
States and Canada.
DOMINION RES VA (D): Free Stock Analysis
TECO ENERGY (TE): Free Stock Analysis Report
INTEGRYS ENERGY (TEG): Free Stock Analysis
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