...Business Risk: Excellent Financial Risk: Significant + SEMCO Energy Inc. is a mostly low-risk rate-regulated gas distribution utility. + The company's regulatory diversity in two states, Michigan and Alaska, partly mitigates its small size. + We view the company's higher-risk gas storage, pipeline, and propane distribution business as marginal in our business risk assessment since they collectively contribute less than 5% of the company's total EBITDA. + Overall, we view the company's management of regulatory risk as consistent with peers. + We assess SEMCO's financial measures using more moderate financial ratio benchmarks compared to the typical corporate issuer, reflecting the company's low-risk regulated business and management of regulatory risk. + We expect the company's funds from operations (FFO)-to-debt to weaken to about 22% in 2018. + Weaker financial measures primarily reflect higher capital spending beginning in 2018, and the effects of U.S. tax reform. + However, we expect...
