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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) DECEMBER 19, 1997
COMMISSION REGISTRANT; STATE OF INCORPORATION; IRS EMPLOYER
FILE NUMBER ADDRESS; AND TELEPHONE NUMBER IDENTIFICATION 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 ENERGY COMPANY 38-0442310
(A Michigan Corporation)
212 West Michigan Avenue
Jackson, Michigan 49201
(517) 788-1030
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ITEM 5. OTHER EVENTS.
ESTABLISHMENT OF EXPANDED EXPERIMENTAL NATURAL GAS CUSTOMER CHOICE PROGRAM
On December 19, 1997, the Michigan Public Service Commission ("MPSC") issued an
ex parte order, responsive to a December 9, 1997 application filed by Consumers
Energy Company ("Consumers"), the principal subsidiary of CMS Energy
Corporation, authorizing a voluntary, experimental program that will allow up
to 300,000 Michigan natural gas customers to choose their own supplier over the
next three years. The new program will begin April 1, 1998, when 100,000
residential, commercial and industrial retail gas sales customers of Consumers
will be offered the opportunity to participate on a first-come, first-served
basis. An additional 100,000 customers will be allowed to participate in the
program in each of the following two years. During the program, Consumers
distribution service rates for all retail gas customers will be frozen. In
addition, the gas cost recovery clause will be suspended and the gas commodity
charge will be frozen at the 1996-97 rate of $2.8364 per thousand cubic feet
(Mcf) for customers who remain full-service sales customers. Finally, an
earnings sharing mechanism will provide for refunds to customers in the event
that Consumer's actual gas utility business earnings exceed certain
predetermined levels. A copy of a press release issued by Consumers on
December 19, 1997 regarding the MPSC's order is included as an Exhibit to this
Current Report on Form 8-K and is incorporated herein by reference. The order,
Case No. U-11599, can be accessed on the MPSC's website,
http://ermisweb.state.mi.us/mpsc/orders.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(99) Press Release of Consumers Energy Company dated December 19, 1997.
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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: December 22, 1997 By: /s/ Alan M. Wright
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Alan M. Wright
Senior Vice President,
Chief Financial Officer
and Treasurer
CONSUMERS ENERGY COMPANY
Dated: December 22, 1997 By: /s/ Alan M. Wright
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Alan M. Wright
Senior Vice President and
Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT
NUMBER
(99) Press Release of Consumers Energy Company dated December 19,
1997.
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EXHIBIT 99
[CONSUMERS ENERGY LETTERHEAD]
JACKSON, Mich., December 19, 1997 - Consumers Energy, the principal
subsidiary of CMS Energy (NYSE; CMS), received approval today from the Michigan
Public Service Commission to begin a voluntary, experimental program that will
allow up to 300,000 natural gas customers choose their own supplier over the
next three years. The experiment is one of the largest and most far-reaching
of its kind in the nation.
The new program includes several features to protect participating and
non-participating customers from distribution service cost increases or cost
shifts, and to maximize incentives for the utility to control its costs and
make efficient business decisions:
- - Distribution service rates for all retail gas customers will be frozen;
- - The gas cost recovery clause will be suspended and the gas commodity
charge will be frozen at the 1996-97 rate of $2.8364 per thousand
cubic feet (Mcf) for customers who remain full-service sales customers;
- - An earnings sharing mechanism will provide for refunds to customers in
the event the company's actual gas utility business earnings exceed
certain predetermined levels. No rate increases can result from the
operation of the mechanism, even if the gas unit's earned return on
equity falls below its authorized level.
"Consumers Energy is Michigan's lowest-cost gas utility. We're holding
our gas commodity charge at a level that is significantly below our Michigan
competitors and 14 percent below the average price of gas on the New York
Mercantile Exchange," said Paul A. Elbert, Consumers Energy's president and
chief executive officer - gas.
The new program will begin April 1, 1998, when 100,000 residential,
commercial and
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industrial retail gas sales customers of Consumers Energy will be offered the
opportunity to participate on a first-come, first-served basis. An additional
100,000 customers will be allowed to take part beginning April 1, 1999, and
another 100,000 customers in the third and final year beginning April 1, 2000.
The Consumers Energy plan represents a statewide expansion of the
experimental pilot program initiated by the utility in Bay County in early
1997. That plan will be ended with the start of the new program, customers
currently enrolled in the Bay County pilot will have the option of receiving
service in the new program or returning to conventional sales service.
Since the mid-1980s, large-volume customers of Consumers Energy have
had the opportunity to select their own suppliers. The Bay County pilot
extended choice to all customers in Bay County. This new program is the first
in Michigan to offer choice to industrial, commercial and residential customers
on a statewide basis. Consumers Energy will still deliver the gas from gas
suppliers to customers participating in the experiment.
The program will give customers the opportunity to tap into a diverse
market of potential gas suppliers. They will also be permitted to elect to
participate at any time during the course of the year, rather than a limited
sign-up period. Customers will be allowed to return to Consumers Energy should
they desire.
"The key to the success of this experiment will be to make the process
of choice simple for customers and to gain insight into why customers make the
choices they do," said Elbert.
Consumers Energy plans to immediately initiate a system-wide
educational program to inform customers of the new program and to allow
alternative suppliers an opportunity to solicit customers. The company will
announce enrollment and application procedures in the near future.
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Consumers Energy, the principal subsidiary of CMS Energy Corporation,
is Michigan's largest natural gas and electric utility serving six million of
the state's nine and one-half million residents in all 68 Lower Peninsula
counties. Consumers Gas Group (NYSE: CPG) is comprised of Consumers Energy's
gas distribution, storage and transmission businesses. Consumers Energy's gas
distribution utility is the fifth largest in the nation and the largest in
Michigan, serving 215 cities and villages including suburban Detroit, Bay City,
Flint, Jackson, Kalamazoo, Lansing, Pontiac and Saginaw in 54 of the 68 Lower
Peninsula counties.
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December 19, 1997
