This report does not constitute a rating action. SEMCO Energy Inc.’s gas rate increase is constructive for credit quality. On Oct. 15, 2026, the Michigan Public Service Commission issued a final decision on the settlement agreement, supporting a $33 million rate increase , premised on 9.85% return on equity and 50% equity ratio. SEMCO received approval to continue its main replacement program (MRP) and infrastructure reliability improvement program (IRIP) through 2031. These mechanisms collectively allow for the modernization of the company’s system and assist in mitigating reliability and safety risks. The rate increase also reflects the Keweenaw Connector Pipeline (KCP). The project entails the construction of a 30-mile, 12-inch steel transmission pipeline between Three Lakes and Baraga, Michigan, that will
