SEMCO Energy Inc.

Overview Key strengths Key risks Lower-risk, fully regulated natural gas distribution and transportation utility operations. The company?s small size makes it susceptible to localized weather and adverse economic conditions. Effective management of regulatory risk in Michigan. Aging pipe materials increase operating risk, though the company has replaced the majority of its old pipe. Manageable debt maturity profile over the coming years. SEMCO is an insulated subsidiary of AltaGas Ltd. , which allows us to rate it one notch above our rating on its parent. The sale would include ENSTAR natural gas, Alaska pipeline Co, its 65% interest in Cook Inlet Natural Gas Storage Alaska (CINGSA), and other ancillary unregulated operations. The transaction is expected to close by first-quarter 2023. We

...AltaGas Ltd (AltaGas) recently announced the sale of its Alaska businesses to Trisummit Utilities Inc. for approximately $800 million, in May 2022. The sale would include ENSTAR natural gas, Alaska pipeline Co, its 65% interest in Cook Inlet Natural Gas Storage Alaska (CINGSA), and other ancillary unregulated operations. The transaction is expected to close by first-quarter 2023. We expect the company to use proceeds from the sale to repay debt at SEMCO Energy Inc., and throughout the group companies, including at the holding company level. This sale is subject to approval from the Alaska commission and as such we continue to monitor related developments....

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