EX-99.(A) 2 k63773ex99-a.txt FIRST CALL RELEASE DATED JULY 12, 2001 1 [CMS ENERGY LOGO] TO: Investment Community FROM: CMS Energy Investor Relations Ph: 517-788-2590; Fx: 517-788-1006 DATE: July 12, 2001 http://www.cmsenergy.com SUBJECT: GAS RATE CASE AND PURCHASED GAS AGREEMENT -------------------------------------------------------------------------------- On June 29, 2001, Consumers Energy filed an application with the Michigan Public Service Commission seeking its first gas service rate increase in 17 years. If approved, the request would add about $6.50 per month, or about 10%, to the typical residential customers average monthly bill. Consumers is seeking a 12.25% authorized return on equity along with a $140 million revenue deficiency as detailed below. Contemporaneously with this filing, Consumers Energy has requested partial and immediate relief in the amount of $34.5 million.
ITEM $ MILLIONS EXPLANATION ---------------------------------------- ----------------- -------------------------------------------------------- 1. Rate Base $59 Carrying cost of increased gas inventory: $36. Return on new investment added since 1994, primarily distribution plant to serve new customers: $23. 2. O&M 55 New or increased customer related expense: $24. Safety, regulatory, employee benefits and system reliability: $31. 3. Book Depreciation 45 New investment since 1994, primarily distribution plant to serve new customers and new book depreciation rates. 4. Cost of Money 8 Higher equity capitalization: $5. Higher return on equity (12.25% v 11.6%): $4. Lower debt cost: $(1). 5. Miscellaneous Revenues (30) Appliance Service Plan, Wholesale Services and other fees. 6. Other (5) Lower real and personal property taxes, MSBT and federal income tax. 7. Michigan Gas Storage Roll-in 8 8. Total Base Rate Increase $140
FINANCIAL CAPITAL STRUCTURE PRE-TAX 13-MONTH AVERAGE PERCENT OF TOTAL ANNUAL COST WEIGHTED COSTS --------------------------------------- -------------------- ----------------------- --------------------------- Long Term Debt 43.12% 6.76% 2.91% Short Term Debt 5.81 7.20 0.42 Preferred Stock 9.38 8.58 0.80 Common Equity 41.69 12.25 5.11 -------------------- --------------------------- 100.00% 9.24%*
*Equivalent to 11.03% rate-making basis. Gas Rate Case U-13000 can be accessed at the Michigan Public Service Commission's website. http://efile.mpsc.cis.state.mi.us/efile/gas.html