SEMCO Energy Inc.

Overview Key strengths Key risks Lower-risk, fully regulated natural gas distribution and transportation utility operations. 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 it has replaced the majority of its old pipe. Manageable debt maturity profile over the coming years. Insulated subsidiary of AltaGas Ltd. , which supports a rating one notch above the rating on its parent. The project entails the construction of a 30-mile, 12-inch steel transmission pipeline between Three Lakes and Baraga, Mich. that will enhance the natural gas supply for about 14,000 customers in the Keweenaw Peninsula. SEMCO estimates the project will entail capital costs of approximately $120

...In May 2025, the Michigan Public Service Commission (MPSC) approved the proposed Keweenaw Connector project. The project entails the construction of a 30-mile, 12-inch steel transmission pipeline between Three Lakes and Baraga, Mich. that will enhance the natural gas supply for about 14,000 customers in the Keweenaw Peninsula. SEMCO estimates the project will entail capital costs of approximately $120 million-$135 million and is targeting an in-service date in the first quarter of 2027. While the incremental capital spending could weaken its overall financial measures after the start of construction, we view the MPSC's approval as supportive of the company's credit quality because it indicates the potential for a manageable cost-recovery...

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