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FORM 8-K
CURRENT REPORT
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) September 11, 1995
Registrant; State of IRS Employer
Commission Incorporation; Address; and Identification
File Number Telephone Number No
1-9513 CMS ENERGY CORPORATION 38-2726431
(A Michigan Corporation)
Fairlane Plaza South, Suite 1100
330 Town Center Drive
Dearborn, Michigan 48126
(313) 436-9261
1-5611 CONSUMERS POWER COMPANY 38-0442310
(A Michigan Corporation)
212 West Michigan Avenue
Jackson, Michigan 49201
(517) 788-1030
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ITEM 5. OTHER EVENTS.
Electric Rate Case Proceedings
On September 11, 1995, CMS Energy Corporation issued a press release
announcing a settlement agreement reached September 8, 1995 between its
utility subsidiary, Consumers Power Company ("Consumers"), and the staff
of the Michigan Public Service Commission ("MPSC") regarding several
outstanding rate proceedings. This agreement resolves several major
regulatory issues, eliminates major uncertainties and provides Consumers
the tools to operate in today's competitive environment. Specifically,
the agreement:
- resolves the current electric rate case and provides for $49.9
million increase;
- eliminates rate subsidization by large industrial customers;
- provides for cost recovery of the 325 MW of uncommitted
Midland Cogeneration Venture capacity;
- implements provisions for incentive ratemaking;
- resolves the Special Competitive Services and depreciation
rate cases;
- implements a limited direct access program;
- enables Consumers to negotiate rates for certain large retail
customers; and
- accelerates recovery of nuclear plant investment.
To expedite the case and consider the proposed settlement agreement, on
September 14, 1995 the MPSC ordered the parties to file testimony in
support or opposition of the proposed settlement agreement by
September 29, 1995, file rebuttal testimony by October 5, 1995, commence
cross-examination by October 9, 1995, file briefs by October 30, 1995, and
file reply briefs by November 6, 1995.
A copy of the press release and a more detailed description of the
settlement are included as exhibits to the report.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrants have duly caused this report to be signed on their behalf by
the undersigned hereunto duly authorized.
CMS ENERGY CORPORATION
Dated: September 15, 1995 By: /s/ S Kinnie Smith, Jr
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S. Kinnie Smith, Jr.
Vice Chairman of the Board
and General Counsel
CONSUMERS POWER COMPANY
Dated: September 15, 1995 By: /s/ S Kinnie Smith, Jr
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S. Kinnie Smith, Jr.
Vice Chairman of the Board
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EXHIBIT INDEX
Exhibit
Number
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99(a) Press Release of CMS Energy, dated September 11, 1995.
99(b) Description of Consumers Power Company Global Settlement
with MPSC Staff.
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EXHIBIT 99(a)<PAGE>
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Exhibit 99(a)
CMS ENERGY NEWS
Contact:
Kelly M. Farr
(313) 436-9253
DEARBORN, Mich., September 11, 1995 - CMS Energy Corporation
(NYSE:CMS) today announced that its utility subsidiary, Consumers Power
Company, and the staff of the Michigan Public Service Commission (MPSC)
jointly filed a settlement that would resolve a number of issues in
several pending cases: a current electric rate case, a special
competitive service case and a depreciation case.
The settlement is subject to review and approval by the
MPSC, which is expected to begin considering the settlement this month.
CMS Energy Corporation is a $41 billion (sales), $8 billion
(asset) international energy company with businesses engaged in electric
and natural gas utility operations; independent power production; natural
gas pipeline and storage; gas and electric marketing; and oil and gas
exploration and production. CMS Energy Corporation's principal subsidiary
is Consumers Power Company, Michigan's largest utility and the nation's
fourth largest gas and electric utility.
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EXHIBIT 99(b)<PAGE>
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Exhibit 99(b)
Consumers Power Company Global Settlement With MPSC Staff
On September 8, 1995 Consumers Power Company (CPCo) and the staff of the
Michigan Public Service Commission (MPSC) filed a settlement agreement at
the MPSC regarding several outstanding rate proceedings. A summary of the
major components of the settlement agreement follow:
ELECTRIC RATE CASE
* Base rate increase of $49.9 million effective upon approval of the
settlement agreement by the MPSC.
* Substantial reduction of residential rate subsidy by large
industrial rate class, resulting in $35 million (4.3%) reduction in
these rates.
* Future annual base rate increases will be determined by the company
subject to verification by the MPSC through 2000, (excluding
nuclear decommissioning surcharges). These increases are limited
to the percentage change in the Detroit Consumers Price Index (CPI)
minus one percent.
* Fuel and purchased power cost recovery to continue under current
provisions or any subsequent mechanism that may be adopted.
MCV COST RECOVERY
* Cost recovery approval for 325 MW of MCV contract capacity, in
addition to the 915 MW already approved by the MPSC, granted
beginning January 1, 1996.
* Initial average capacity charge of 2.86 cents per kWh, escalating
to 3.62 cents per kWh in 2004 and thereafter as shown in the table
below.
SPECIAL COMPETITIVE SERVICES RATE AND DIRECT ACCESS SERVICE
* Qualifying retail customers (those with maximum demand of at least
3 MW) can purchase generation services from any independent power
producer or qualifying facility located in Michigan (excludes
investor owned utilities, co-ops, municipal utilities and existing
customer generation.)
* CPCo can enter into contracts with these qualifying retail
customers at negotiated rates; however, CPCo cannot request rate
recovery for any discounts prior to January 1, 2000.
* Load under the direct access service and negotiated rate contracts
limited to a total of 650 MW.
* CPCo to receive a direct access service charge equal to 1.1 cents
per kWh and a replacement power charge of at least the cost of
replacement power plus 1.1 cents per kWh.
* Direct access service to be available through at least December 31,
2000.
DEPRECIATION RATE CASE
* Overall annual depreciation expense unchanged for electric and
common utility plant, while implementing depreciation rate changes
for individual accounts and groups.
* Increase in depreciation reserve balances of $86.6 million for
Palisades Nuclear Plant and $7.0 million for Big Rock Nuclear Plant
and decrease of $93.6 million for Transmission Plant.
* Record $18 million of annual Steam Production Plant depreciation
expense in the nuclear plant depreciation reserve (Palisades - $13
million; Big Rock Point - $5 million).
Composite Capacity Charges for the 325 MW of MCV Power
Covered by the Settlement Agreement (in cents/kWh)
Average On-Peak Off-Peak
1996 2.89 2.969 2.821
1997 3.17 3.267 3.104
1998 3.23 3.328 3.162
1999 3.29 3.390 3.220
2000 3.35 3.452 3.279
2001 3.42 3.520 3.344
2002 3.49 3.588 3.409
2003 3.55 3.657 3.474
2004 and 3.62 3.725 3.539
thereafter
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