Miller, Canfield, Paddock and Stone, P.L.C. One Michigan Avenue, Suite 900 Lansing, Michigan TEL (517) FAX (517)

Transcription

1 Founded in 1852 by Sidney Davy Miller SHERRI A. WELLMAN TEL (517) FAX (517) Miller, Canfield, Paddock and Stone, P.L.C. One Michigan Avenue, Suite 900 Lansing, Michigan 489 TEL (517) FAX (517) MICHIGAN: Ann Arbor Detroit Grand Rapids Kalamazoo Lansing Troy FLORIDA: Tampa ILLINOIS: Chicago NEW YORK: New York OHIO: Cincinnati CANADA: Toronto Windsor CHINA: Shanghai MEXICO: Monterrey POLAND: Gdynia Warsaw Wrocław June 28, 2017 Ms. Kavita Kale Executive Secretary Michigan Public Service Commission 7109 W. Saginaw Hwy. Lansing, MI Re: SEMCO Energy Gas Company GCR Reconciliation MPSC Case No. U R Dear Ms. Kale: Enclosed for electronic filing are the Application and Direct Testimony and Exhibits of Jay E. Skillman, Tamara L. Spencer and James A. Van Sickle. Also enclosed is the Entry of Appearance in an Administrative Hearing of Sherri A. Wellman. Please be advised that a marked-up version of the Notice of Hearing has been ed to Angela McGuire at mcguirea@michigan.gov. Should you have any questions, please kindly advise. Very truly yours, Miller, Canfield, Paddock and Stone, P.L.C. SAW/kld Enclosures cc w/enc: Steve McLean Walt Fitzgerald Jim Van Sickle Tamara L. Spencer Jay E. Skillman \ By: Sherri A. Wellman

2 MICHIGAN DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS PUBLIC SERVICE COMMISSION ENTRY OF APPEARANCE IN AN ADMINISTRATIVE HEARING This form is issued as provided for by 199 PA, as amended, and by 19 PA 254, as amended. The filing of this form, or an acceptable alternative, is necessary to ensure subsequent service of any hearing notices, Commission orders, and related hearing documents. General Instructions: Type or print legibly in ink. For assistance or clarification, please contact the Public Service Commission at (517) Please Note: The Commission will provide electronic service of documents to all parties in this proceeding. THIS APPEARANCE TO BE ENTERED IN ASSOCIATION WITH THE ADMINISTRATIVE HEARING: Case / Company Name: Docket No. Please enter my appearance in the above-entitled matter on behalf of: 1. (Name) 2. (Name). (Name) 4. (Name) 5. (Name). (Name) 7. (Name) Name Address City State Zip Phone ( ) I am not an attorney I am an attorney whose: Michigan Bar # is P- Bar # is: ( state ) Date Signature: Save Form EAHR1-09/29/201

3 S T A T E O F M I C H I G A N BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION * * * * * In the matter of the application of SEMCO ENERGY GAS COMPANY for reconciliation of the gas cost recovery plan for the -month period ending March 1, ) ) Case No. U R ) ) APPLICATION SEMCO Energy Gas Company, a division of SEMCO Energy, Inc., ( SEMCO Gas or the Company ) files this Application with the Michigan Public Service Commission ( Commission ) requesting approval of its Gas Cost Recovery ( GCR ) reconciliation for the -month period beginning April 1, 201 and ending March 1, 2017, and approval of related reconciliation determinations relative to the -month period ending March 1, In support of this Application, SEMCO Gas represents to the Commission as follows: 1. SEMCO Gas, with its principal office located at 1411 Third Street, Suite A, Port Huron, Michigan, is engaged as a public utility in the business of supplying natural gas to the public in its various service areas throughout the state of Michigan. 2. SEMCO Gas s retail natural gas sales and retail gas transportation business is subject to the jurisdiction of the Commission.. Pursuant to 1982 PA 04 ( Act 04 ) and Commission orders, SEMCO Gas is authorized to incorporate a GCR Clause in its rate schedules. See Case Nos. U-7481, U-1472, U-159 and U Pursuant to the Commission s October 11, 201 Order Approving Settlement Agreement as issued in Case No. U-17942, the Commission (i) approved SEMCO Gas s 201-

4 2017 GCR plan as amended, and (ii) authorized SEMCO Gas to charge a base GCR factor of $.521 per dekatherm ( Dth ) comprised of a Balancing and Demand Charge of $ per Dth and a commodity cost of $2.79 per Dth. The base GCR factor of $.521 per Dth was subject to adjustment under an approved GCR factor adjustment mechanism. The Balancing and Demand Charge was also applied to Gas Customer Choice ( GCC ) customers. 5. Pursuant to h() of Act 04, SEMCO Gas hereby files for, and requests approval of, a reconciliation of the revenues recorded pursuant to the authorized GCR factors with the costs of gas sold during the -month period beginning April 1, 201 and ending March 1, SEMCO Gas is filing, as part of this Application, testimony and exhibits sufficient to allow reconciliation in accordance with h() through h(15) of Act 04.. Such testimony and exhibits indicate that SEMCO Gas has a cumulative GCR over-recovery of $1,188,92 as of March 1, 2017, inclusive of interest. This cumulative overrecovered balance reflects the roll-in of the prior year s GCR over-recovered amount and the allocated portion of the Balancing and Demand over-recovered amount as approved in Case No. U-1792-R. SEMCO Gas proposes to roll-in the GCR over-recovery of $1,188,92 into the beginning balance of its GCR costs. 7. The testimony and exhibits also reflect that SEMCO Gas has determined that it has a cumulative Balancing and Demand over-recovery of $11,82 inclusive of interest, for the -month period ending March 1, The over-recovery reflects the prior year s overrecovery of $90,845 as approved in Case No. U-1792-R. SEMCO Gas proposes to roll-in the cumulative Balancing and Demand over-recovery into the beginning balance of its Balancing and Demand costs. 2

5 8. SEMCO Gas represents that the proposals contained in this Application are just, reasonable and in the public interest. WHEREFORE, SEMCO Gas requests that the Commission: A. Establish an early time and place for hearing and give notice thereof; B. Approve the reconciliation of the -month gas costs and revenues, as well as the Balancing and Demand charge costs and revenues, for the period April 1, 201 through March 1, 2017, as presented by SEMCO Gas; C. Find and determine that SEMCO Gas s gas costs, and balancing and demand costs incurred during the period April 1, 201 through March 1, 2017, were reasonably and prudently incurred; D. Authorize SEMCO Gas to roll-in the cumulative GCR over-recovery of $1,188,92 and the cumulative Balancing and Demand over-recovery of $11,82 into the beginning balance of its period GCR and Balancing and Demand costs; and E. Grant SEMCO Gas such other and further authority as may be lawful and proper. Respectfully submitted, SEMCO ENERGY GAS COMPANY Dated: June 28, 2017 By: Its Attorney Sherri A. Wellman (P8989) MILLER, CANFIELD, PADDOCK AND STONE, P.L.C. One Michigan Avenue, Suite 900 Lansing, Michigan \

6 STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION * * * * * In the matter of the application of ) SEMCO ENERGY GAS COMPANY for ) Reconciliation of the gas cost recovery ) Case No. U R plan for the -month period ended ) March 1, ) DIRECT TESTIMONY AND EXHIBITS OF JAY E. SKILLMAN ON BEHALF OF SEMCO ENERGY GAS COMPANY

7 TESTIMONY OF JAY E. SKILLMAN ON BEHALF OF SEMCO ENERGY GAS COMPANY Q. Please state your name and business address. A. My name is Jay E. Skillman. My current business address is 1411 Third Street, Suite A, Port Huron, Michigan Q. Mr. Skillman, by who are you employed and in what position? A. I am employed by SEMCO Energy Gas Company ( SEMCO Gas or the Company ). My present position is Manager of Gas Accounting. Q. What are your responsibilities as Manager of Gas Accounting? A. Under the supervision of the Controller, I have the responsibility of preparing and recording the Company s Cost of Gas calculation and the reconciliation of all related accounts. I am also responsible for the calculation and monitoring of unbilled revenue and lost and unaccounted for gas. At management s request I prepare financial analysis and projections covering cash flows, budgeting, etc. Other duties include the preparation of various regulatory filings both on the state and federal levels. Q. Please summarize your academic background. A. I graduated from Michigan State University in 1981 with a Bachelor degree in Business Administration with a major in accounting. Q. Please summarize your employment and professional experience. A. From December 1981 to July of 1985, I was employed in the public accounting field by a small regional accounting firm, as well as with PricewaterhouseCoopers, formerly known as Coopers & Lybrand. From 1985 to 1988, I was employed as an internal auditor by a Fortune 500 company, Alco Standard Corp., a conglomerate of diversified companies. In December of 1988, I joined SEMCO Gas as a Senior Internal Auditor. In April of 1991, I was promoted to Manager of Internal Audit. I served in this position until July of 199 when I assumed the position of Supervisor of Gas Cost Accounting. From July 1997 to April 1999, I was employed by SEMCO Energy Services, Inc., the former unregulated marketing division 1

8 TESTIMONY OF JAY E. SKILLMAN ON BEHALF OF SEMCO ENERGY GAS COMPANY of SEMCO Energy, Inc., serving as Accounting Manager until assuming my current position of Manager of Gas Accounting in May Q. Have you previously testified before the Michigan Public Service Commission ( MPSC )? A. Yes, I have filed testimony in several of SEMCO Gas GCR reconciliation cases before the MPSC. Q. Mr. Skillman, what is the purpose of your testimony in this proceeding? A. The purpose of my testimony is to address SEMCO Gas s GCR and GCC B&D over recoveries for the twelve month period ended March 1, Q. Will you please identify the exhibits which you are sponsoring? A. I am sponsoring the following exhibits Exhibit A-1 Gas Cost Recovery Calculation GCR Costs Exhibit A-2 Gas Cost Recovery Calculation Balancing and Demand Costs Exhibit A- Purchased and Produced Dollars and Volumes Exhibit A-4 Interest Calculation for Months ended March 1, 2017 Exhibit A-5 GCR Calculation Pro-forma Actuals Exhibit A- Detail of Purchased and Produced Pro-forma Actual Dollars and Volumes Q. Were these exhibits prepared by you or under your supervision? A. Yes. Q. Please explain the components of the GCR Over/Under calculation on Exhibit A-1. A. Exhibit A-1 calculates the GCR over recovery for the twelve months ended March 1, The cumulative over-recovery for the twelve month period totaled $1,089,79, line 5, exclusive of accrued interest. This amount is determined by subtracting Total GCR Cost of Gas Sold, line 40, $,888,459 from the Total GCR revenue $7,80,859, line 50 and 2

9 TESTIMONY OF JAY E. SKILLMAN ON BEHALF OF SEMCO ENERGY GAS COMPANY adding the roll-in of the prior period s gas GCR over recovery $297,94, line 54. Q. Please discuss the primary factor that contributed to the $1,089,79 over recovery, Exhibit A-1, line 5. A. In February, when March 2017 rates were set, the Company had projected a minimal under recovery based on normal weather. However, March weather was 9% colder than normal, which in turn drove up the over recovery as the increase in demand was met primarily by low cost withdrawals from storage. Q. Explain the types of costs included in Exhibit A-1, line 2, Purchased and Produced - Commodity Costs, and line 27, B&D costs. A. The majority of gas commodity costs are related to the purchase of physical gas volumes from various natural gas suppliers, as shown on Exhibit A-, page 1 of 2, lines 2 to 14. In addition to the cost of purchased gas, commodity costs include variable pipeline and storage costs as well as imbalance charges or credits. Line 27, Balancing and Demand (B&D) costs pertain to the charges incurred to obtain capacity, necessary to transport and/or store the gas commodity, in accordance with the Company s GCR plan. These costs, reflected on Exhibit A-, page 1 of 2, lines 28-, are primarily fixed pipeline and storage demand charges, but will also include charges or credits related to holding capacity, such as capacity release credits. Q. What is the Total GCR Cost of Gas Sold, line 40 of Exhibit A-1? A. The Total Booked Cost of Gas Sold, Exhibit A-1, line 1, totaled $,27,548 for the plan year. Referring to lines 2-1, the Total Cost of Gas Sold was determined by summing the Company s Commodity Costs, B&D costs, Net (to) from storage, Transportation credits, less the Gas Customer Choice ( GCC ) customers portion of the B&D and transport credit costs, to arrive at Booked Cost of Gas, shown on line 4. Booked Cost of Gas is then adjusted for Company Use Gas, line, Lost and

10 TESTIMONY OF JAY E. SKILLMAN ON BEHALF OF SEMCO ENERGY GAS COMPANY Unaccounted for Gas, line 7, and Gas in Kind credits, line 8, to arrive at Total GCR Cost of Gas Sold, line 40. Q. Please explain Exhibit A-1, line 29, B&D Transport Credits. A. Transportation Credits, line 29, are a result of the approved Settlement Agreements in Case Nos. U-120 and U-15. The Company will charge to its large volume transportation customers, when applicable, balancing charges, capacity improvement charges, and penalties. These transportation costs are considered B&D costs and, therefore, the transportation charge revenues are reflected a reduction to Total B&D costs. Q. Please explain the roll-in of the Prior Year over recovery, Exhibit A-1, line 54. A. On March 28, 2017, the Company received authorization in Case No. U R to roll into SEMCO Gas s GCR gas reconciliation the GCR over recovery of $297,94, line 2. Q. Explain lines 0 and 1 from Exhibit A-1, Less GCC portion of B&D Costs and Less GCC portion of Transport Credits. A. The Company incurred $1,207,102 of B&D costs, line 0 and $(874,99) of Transportation credits, line 29, during the reconciliation period. A portion of these costs/credits are allocated to GCC customers and recovered through the GCC cost reconciliation as shown on Exhibit A-2. The B&D costs and Transportation credits are allocated to GCC customers based on their respective percentage of billed sales, based the monthly B&D billing rate. The allocation percentage for GCC costs/credits for the year ended March 1, 2017, was 8.25%, of total B&D costs, as shown in Exhibit A-2, page 2 of 2, line 28. Total GCC allocated amounts were ($2,57,77) of B&D costs and $72,104 of Transportation credits, Exhibit A-1, line 0 and 1 respectively. 4

11 TESTIMONY OF JAY E. SKILLMAN ON BEHALF OF SEMCO ENERGY GAS COMPANY Q. How is the cost of Company Use Gas, Lost and Unaccounted for Gas, and Gas in Kind, Exhibit A-1, lines -8 calculated? A. The cost of Company Use Gas, Lost and Unaccounted for Gas, and Gas in Kind is calculated by multiplying the volumes of Company Use, Lost and Unaccounted for Gas, and Gas in Kind, lines -8 of Exhibit A-1, by the average cost of gas for the plan year. The average cost of gas for the plan year is $.55 per Dth and was calculated by dividing the sum of: the purchased Gas Commodity costs, line 2, B&D costs, line 28, Net (to)from storage, line 27 and the GCC portion of Demand costs, line 0, by Total Supply (DTH), line 4. Q. Explain the Company s Total GCR Revenue on Exhibit A-1, line 50. A. Total GCR Revenue for the year ended March 1, 2017 was $7,80,859. Total GCR Revenues is the total of Billed GCR Revenue - commodity, line 4, and the net of Unbilled GCR Revenues, lines 47 and 48. Rate Schedule Sales, line 15, of Exhibit A-1, is multiplied by the GCR factor in effect for the billing month, line 45, of Exhibit A-1, to arrive at Billed GCR Commodity Revenues, line 4. Unbilled GCR Revenues Current Month, line 48 is calculated by multiplying the Unbilled GCR Volumes Current Month, line 18, of Exhibit A-1, by the GCR factor of the subsequent month. The previous month s Unbilled GCR Revenues Prior Month, line 47 is reversed to arrive at Total GCR Commodity Revenue, line 50, of Exhibit A-1. Q. What was the over/under recovery for the GCC B&D costs for the year ended March 1, 2017? A. Exhibit A-2 calculates the GCC B&D over recovery for the twelve months ended March 1, The cumulative over recovery for the period was $110,954, exclusive of interest, as shown on line 4 of Exhibit A-2, page 1 of 2. Q. Please explain the components of the GCC B&D Over/Under calculation shown on Exhibit A-2, page 1 of 2. 5

12 TESTIMONY OF JAY E. SKILLMAN ON BEHALF OF SEMCO ENERGY GAS COMPANY A. Similar to the GCR over/under recovery calculation, the over/under recovery amount is determined by subtracting Total Allocated B&D costs, line 14, from Total GCC B&D billed revenue, line 2, to arrive at the over recovery shown on line 0. The approved prior-year over recovery of $90,845 (U-1792-R), is added to line 0 to arrive at the Total GCC B&D over recovery of $110,954, line 4. Q. Please explain Exhibit A-2, page 1 of 2, line 11, total Allocated GCC B&D costs at 8.25%. A. Allocated GCC B&D costs are the GCC customers portion of the Total Company s B&D costs shown on Exhibit A-1, line 28, page 4, lines 11 through 22, for additional information regarding the allocation process. Q. Please explain Exhibit A-2, line 11, Allocated GCC B&D Transport Credits at 8.25%. A. B&D Transportation credits, previously discussed on page, lines 27-0 and page 4, lines 1- of this testimony, are considered B&D costs. As a B&D cost, they are allocated between GCR and GCC customers in the same manner, previously discussed. Q. Explain the Company s Total GCC B&D revenues, Exhibit A-2, line 2, page 1 of 2 A. Total GCC B&D Billed Revenue for the year ended March 1, 2017, was $2,521,82, Exhibit A-2, page 1 of 2, line 28. Total GCC B&D revenue is the total of GCC B&D billed to customers, line 2, and the net of Unbilled GCC B&D revenues, lines 24 and 25. Similar to GCR Revenue, GCC Rate Schedule Sales, line, are multiplied by the B&D charge in effect, line 21, to arrive at GCC B&D Billed to Customers, line 2. Unbilled GCC B&D Current Month, line 25, is calculated by multiplying the Unbilled GCC Volumes Current Month, line 5, by the GCC B&D factor of the subsequent month. The previous month s Unbilled GCC B&D Revenues Prior Month, line 24, is reversed to arrive at Total GCC B&D Billed Revenue, line 2.

13 TESTIMONY OF JAY E. SKILLMAN ON BEHALF OF SEMCO ENERGY GAS COMPANY Q. Explain the calculation of B&D allocation percentage from Exhibit A- 2, page 2 of 2. A. The allocation of B&D cost between GCR and GCC customers is based on the percentage of billed B&D revenues to total B&D revenues (GCR & GCC). For the year ended March 1, 2017 GCR and GCC customers were allocated 91.75% and 8.25% of B&D costs respectively, Exhibit A-2, page 2 of 2, lines B&D billed revenues for the year totaled, GCR B&D $28,055,17, Exhibit A-2, page 2 of 2, line 21, and GCC B&D of $2,521,82, Exhibit A-2, line 2, page 1 of 2, for a total of $0,57,555. Q. Explain how the Total GCR B&D Costs of $28,055,17 was determined. A. The Total GCR B&D Revenue is calculated in the same manner as Total GCR Revenue, Exhibit A-1, line 50, which is explained on page 5, line - 1. The Total GCR B&D revenue calculation uses the effective B&D factor whereas the Total GCR revenue from Exhibit A-1 uses the total GCR rate (Commodity factor + B&D factor). Q. Please explain the components of Exhibit A-. A. Exhibit A-, Purchased and Produced, presents the booked costs and quantities of purchased gas during the GCR plan year. The schedule consists of purchases from suppliers, demand and transportation costs, imbalances, and other costs incurred in the purchase and delivery of the Company s supply during the GCR year. Total gas Commodity and B&D costs are recorded separately and are reflected on Exhibit A-, page 1, lines 24 and 5, respectively, and support amounts shown on Exhibit A-1, line 2, and 27. Purchased and Produced volumes are reflected on Exhibit A-, page 2, line 24, and support the volumes shown on Exhibit A-1, line 1. Q. Have you calculated interest on the accrued over/under recoveries? A. Yes. The Company prepares two reconciliations, a GCR over recovery reconciliation based on activity reflected in Exhibit A-1, and a GCC B&D over recovery reconciliation, based on activity from Exhibit A-2. 7

14 TESTIMONY OF JAY E. SKILLMAN ON BEHALF OF SEMCO ENERGY GAS COMPANY Accordingly, Exhibit A-4 presents two independent interest calculations: 1) a GCR interest calculation, lines -21, and 2) a GCC B&D interest calculation, lines For the twelve month period ended March 1, 2017, the Company incurred interest expense on the GCR over/under recovery of $98,899, Exhibit A-4, line 17. An interest expense of $2,728 was accrued on the GCC B&D over/under recovery, Exhibit A-4, line 47. Q. How are interest rates determined? A. For months having a net over recovery, interest is accrued at the Company s authorized return on equity of 10.5%. For months when there is a net average under recovery, interest accrues at the Company s short term borrowing rate in effect for that month. Interest is calculated based upon 5 days in the year and the actual number of days in the month. Q. What is the net over recovery for the GCR period? A. The GCR over recovery, including interest, for the GCR plan year ended March 1, 2017, was $1,188,92, Exhibit A-4, line 21. The GCC B&D over recovery at March 1, 2017, was, inclusive of interest, $11,82, Exhibit A-4, line 51. Q. Please explain the purpose of Exhibit A-5 and Exhibit A-. A. Exhibits A-5 and A- are a result of the Settlement Agreement in Case No. U-122-R which requires the Company to provide exhibits similar to Exhibit A-1 and Exhibit A-, with actual monthly data, for the relevant - month GCR reconciliation period. Q. What are the primary differences between Exhibits A-1 through A- and Exhibits A-5 and A-? A. Exhibits A-1 through A- reflect booked dollars and volumes based on monthly estimated activity, adjusted for the prior month estimate to actual adjustments. Prior month estimate to actual adjustments are normal recurring adjustments resulting from the lack of availability of actual 8

15 TESTIMONY OF JAY E. SKILLMAN ON BEHALF OF SEMCO ENERGY GAS COMPANY financial and volumetric data at each month-end. Exhibits A-5 and A- are pro-forma schedules representing dollars and quantities based on actual activity, in the month incurred. Exhibit A-5 and Exhibit A- essentially reflect prior period adjustments in the month of origination rather than in the month recorded. These schedules are included for analysis purposes only and are not meant to represent an adjusted or corrected GCR over/ under recovery. Q. How does the Company plan to recover, from its customers, the net plan year GCR and GCC B&D over recoveries? A. The Company proposes to roll-in the net GCR and GCC B&D over recoveries, of $1,188,92 and $11,82, Exhibit A-4, lines 21 and 51, respectively, into the GCR plan year reconciliation for GCR and GCC B&D costs. Q. Does this complete your prefiled direct testimony at this time? A. Yes. 9

16 Exhibit A-1 CASE NO: U R SEMCO Energy Gas Company - MPSC DIVISION Gas Cost Recovery Calculation - GCR Costs Months Ended March 1, LINE APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH TOTAL SOURCES OF GAS 1 Purchased and Produced - DTH,44,82,50,940,02,249 2,75,201 2,959,191 2,725,9,75,07 2,9,519 2,97,748,59,811 2,19,955 1,9,405 5,2,070 2 Net (To) From Storage 98,718 (1,8,422) (2,1,279) (1,989,94) (2,229,59) (1,957,010) (1,518,2) 284,40,19,025 2,771,72 2,79,40,7,72 52,2 4 Total Supply,44,550 1,40,518 85, , ,52 78,902 1,85,45,250,949,142,77,41,54 4,819,595 5,10,17 5,915,72 5 Adjust Volumes For: Company Use Gas (1,17) (25,000) (20,7) (27,29) (4,1) (,150) (18,841) (22,54) (21,11) (20,411) (109) (,4) (201,25) 7 Lost And Unaccounted For Gas (21,28) (1,02) (8,872) (8,295) (8,72) (5,941) 45,8 74,029 5,588 (22,75) (18,2) (19,780) 58,28 8 Gas In Kind 21,080 17,18 15,9 1,81 1,091 14,578 1,027 17,552 18,782 24,72 2,7 21,227 21, TOTAL SUPPLIES,441,70 1,19,0 851,74 72,84 729, ,89 1,899,49,19,99,20,00,22,70 4,824,50 5,278,28 5,989,29 1 SALES - DTH Rate Schedule Sales (Billed) 4,182,85 2,857,994 1,48,455 8,44 74,722 72,44 80,44 1,77,894,74,1,844,10,02,099 5,19,717 5,17, Unbilled - Prior Month (,148,770) (2,407,5) (1,19,01) (57,520) (428,010) (42,247) (522,190) (1,591,015) (,17,117) (5,599,81) (5,078,2) (,879,97) (27,922,584) 18 - Current Month 2,407,5 1,19,01 57, ,010 42, ,190 1,591,015,17,117 5,599,81 5,078,2,879,97,91,218 28,75, Rate Schedule Sales (Unbilled) (741,15) (1,28,4) (1,781) (109,510) (4,7) 98,94 1,08,825 1,54,102 2,42,99 (521,550) (1,198,59) 81,521 8, Total Sales -Dth,441,70 1,19,0 851,74 72,84 729, ,89 1,899,49,19,99,20,00,22,70 4,824,50 5,278,28 5,989, COST OF GAS SOLD ($) 25 2 Commodity Costs - Purchased and Produced $,49,899 $ 7,217,55 $,027,408 $ 7,70,991 $ 7,54,59 $ 7,14,459 $ 9,404,784 $ 8,27,09 $ 9,79,982 $ 14,4,72 $ 7,191,28 $ 4,98,289 $ 95,940,51 27 Balancing and Demand (B&D) costs 1,890,92 1,9,10 1,70,281 1,915,815 2,119,408 2,211,98 2,081,809,772,725 2,917,597,592,84,572,779,489,281 1,207, Net (To) From Storage 74,91 (,7,45) (4,271,7) (5,472,9) (5,2,288) (5,28,540) (4,52,175) 59,84 8,005,149,97,148,40,040 8,88,205 2,855,02 29 B&D Transport Credits (71,02) (9,95) (94,752) (50,941) (44,521) (4,815) (7,727) (80,52) (71,751) (81,8) (91,742) (9,9) (874,99) 0 Less GCC portion of Demand Costs (155,928) (159,54) (140,702) (157,981) (174,79) (182,79) (171,9) (11,104) (240,589) (29,257) (294,1) (287,71) (2,57,77) 1 Less GCC portion of Transport Credits 5,880 5,78 7,81 4,201,71,80,080,4 5,917,72 7,55 7,974 72, Booked Cost Of Gas Sold $ 8,87,84 $ 5,25,8 $,24,28 $,09,0 $,785,070 $ 4,014,28 $,895,10 $,195,145 $ 20,5,05 $ 24,595,401 $ 17,025,24 $ 1,787,22 $,27,548 5 Less Cost Of Gas For Company Use Gas (5,77) (88,701) (7,8) (9,45) (14,589) (21,820) (,848) (79,951) (74,909) (72,419) (87) (118,) (71,98) 7 Lost And Unaccounted For Gas (75,51) (4,217) (1,478) (29,41) (0,78) (21,079) 11,925 22,57 22,708 (80,4) (5,010) (70,180) 20,949 8 Gas In Kind 74,792 0,9 54,42 49,179 4,447 51,72 5,84 2,275,9 8,472 82,907 75,14 77, Total GCR Cost Of Gas Sold $8,87,407 $5,182,81 $,18,5 $,52,224 $,78,159 $4,02,107 $7,047,044 $,440,5 $20,580,742 $24,528,790 $17,042,77 $1,74,144 $,888, REVENUES ($) 4 44 Maximum Factor Permitted $.992 $.992 $.992 $.5248 $.7028 $.7028 $.58 $.521 $.521 $.521 $.521 $ Factor Billed To Customers $.992 $.00 $.900 $.510 $.7000 $.7000 $.500 $.521 $.5400 $.5400 $.5400 $.4800 $ Billed GCR Revenue 14,218,95 9,517,0 5,028,9 2,925,287 2,718,471 2,488,050,01,851,18,788 1,251,92 24,228,857 21,21,770 18,084,575,1,49 47 Unbilled GCR Revenues - Prior Month (10,70,299) (8,017,425) (,9,90) (1,88,85) (1,58,7) (1,5,014) (1,905,994) (5,7,55) (11,105,94) (19,82,49) (17,977,02) (1,501,4) (97,701,1) 48 Unbilled GCR Revenues - Current Month 8,017,425,9,90 1,88,85 1,58,7 1,5,014 1,905,994 5,7,55 11,105,94 19,82,49 17,977,02 1,501,4 15,250,89 102,249, Total GCR Revenue $11,52,521 $5,4,25 $2,951,88 $2,22,08 $2,700,848 $2,828,00 $,79,2 $11,75,827 $21,99,47 $22,82,570 $1,84,054 $19,8,918 $7,80, (Under) Over Recovery $2,5,114 $281,244 ($21,725) ($910,15) ($1,085,11) ($1,195,077) ($25,82) ($8,298) $1,88,05 ($2,14,220) ($19,719) $,159,774 $792, Roll-in of Prior Year Over Recovery (U-1792-R) $ 297,94 $ 297, Cumulative GCR (Under) Over Recovery $2,92,508 $,24,752 $,0,027 $2,101,871 $1,01,50 ($178,517) ($42,49) ($1,115,47) $272,958 ($1,87,22) ($2,09,981) $1,089,79 $1,089,79

17 SEMCO Energy Gas Company Gas Cost Recovery Calculation - Balancing and Demand Costs Months Ended March 1, 2017 Exhibit A-2 CASE NO: U R Page 1 of LINE APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH TOTAL SOURCES OF GAS - GCC 1 GCC SALES - DTH 2 Rate Schedule Sales (Billed) 55,214 2,19 10,42 77,29 8,17 7,94 85,9 181,015 47,298 20,159 52,28 45,709,152,822 4 Unbilled - Prior Month (274,49) (204,458) (9,8) (47,228) (9,870) (9,29) (1,57) (20,) (519,540) (40,8) (9,221) (2,557,05) 5 - Current Month 204,458 9,8 47,228 9, ,540 40,8 9,221 48,8 2,1,27 Rate Schedule Sales (Unbilled) (70,08) (107,772) (49,458) (7,58) (01) 1, ,80 15,55 199,417 (59,157) (1,12) 8,907 7,2 7 Total Sales -Dth 285,17 8,547 80,884 70,271 7,5 81,441 19,199 7,571 54,715 51, ,4 45,1,22, Balance and Demand Costs ($) Allocated GCC B&D 8.25% 155, ,54 140, , ,79 182,79 171,9 11, ,589 29, ,1 287,71 2,57,77 Allocated GCC B&D Transport Credits (5,880) (5,78) (7,81) (4,201) (,71) (,80) (,080) (,4) (5,917) (,72) (7,55) (7,974) (72,104) 1 14 Total Allocated GCC B&D costs 150,048 15,885 12,889 15, , ,519 15,589 04,40 24,72 289, , ,757 2,501, REVENUES ($) Maximum Factor Permitted $0.797 $0.797 $0.797 $0.90 $0.90 $0.90 $0.90 $ $ $ $ $ $ Factor Billed To Customers $0.797 $ $ $0.90 $ $ $0.900 $ $ $ $ $ $ GCC B&D Billed To Customers 28,19 18,92 102,970 72,218,95,190 79, ,48 274,5 489,92 409,190 27,40 2,49,0 24 Unbilled GCC B&D - prior month (218,98) (11,522) (7,82) (4,9) (7,079) (,520) (49,071) (10,559) (252,897) (410,47) (57,718) (24,221) (2,018,280) 25 Unbilled GCC B&D - current month 11,522 7,82 4,9 7,079,520 49,071 10, , ,47 57,718 24,221 24,90 2,04,01 2 Total GCC B&D (Billed+Unbilled) $225,902 $101,552 $70,524 $5,1 $2,8 $75,740 $10,907 $2,824 $41,905 $47,207 $294,94 $27,928 $2,521, (UNDER) OVER Recovery - GCC B&D costs $75,854 ($52,) ($2,4) ($88,419) ($108,21) ($102,779) ($4,82) ($7,) $197,2 $147,81 $7,4 $48,172 $20, Roll-in of Prior Year Over Recovery (U-1792-R) $90,845 $90,845 4 Total (Under) Over Recovery - GCC B&D costs $1,99 $114, $52,002 ($,417) ($144,78) ($247,457) ($252,19) ($289,775) ($92,542) $55,19 $2,782 $110,954 $110,954

18 SEMCO Energy Gas Company Gas Cost Recovery Calculation - Balancing and Demand Costs Calculation of B&D Allocation Percentage Months Ended March 1, 2017 Exhibit A-2 CASE NO: U R Page 2 of APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH TOTAL 1 Rate Schedule Sales (Billed) - GCR 4,182,85 2,857,994 1,48,455 8,44 74,722 72,44 80,44 1,77,894,74,1,844,10,02,099 5,19,717 5,17,821 2 Unbilled GCR - Prior Month (,148,770) (2,407,5) (1,19,01) (57,520) (428,010) (42,247) (522,190) (1,591,015) (,17,117) (5,599,81) (5,078,2) (,879,97) (27,922,584) 4 Unbilled GCR Current Month 2,407,5 1,19,01 57, ,010 42, ,190 1,591,015,17,117 5,599,81 5,078,2,879,97,91,218 28,75,02 5 Net Unbilled (741,15) (1,28,4) (1,781) (109,510) (4,7) 98,94 1,08,825 1,54,102 2,42,99 (521,550) (1,198,59) 81,521 8, Total GCR Sales -Dth,441,70 1,19,0 851,74 72,84 729, ,89 1,899,49,19,99,20,00,22,70 4,824,50 5,278,28 5,989, REVENUES ($) Maximum Factor Permitted $0.797 $0.797 $0.797 $0.90 $0.90 $0.90 $0.90 $ $ $ $ $ Factor Billed To Customers $0.797 $ $ $0.900 $ $ $0.900 $ $ $ $ $ $ GCR B&D Billed To Customers,,25 2,257,815 1,171, ,010 8,291 25,75 772,499 1,401,7 2,957,21 5,407,005 4,79,948,72,04 27,79, Unbilled GCR B&D - prior month (2,511,459) (1,902,02) (92,748) (499,894) (98,049) (9,20) (485,7) (1,25,902) (2,478,22) (4,42,855) (,945,81) (2,781,74) (22,001,072) 20 Unbilled GCR B&D - current month 1,902,02 92, ,894 98,049 9,20 485,7 1,25,902 2,478,22 4,42,855,945,81 2,781,74 2,772,85 22,22,4 21 Total GCR B&D Revenue (Billed+Unbilled) $2,72,82 $1,279,51 $748,075 $7,1 $78,82 $717,92 $1,54,74 $2,22,797 $4,902,74 $4,928,9 $,515,878 $,717,15 $28,055, GCR/GCC Balance and Demand allocation % $ % 28 GCC Sales 2,521, % 29 GCR Sales 28,055, % 0 Total Sales 0,57, %

19 SEMCO ENERGY GAS COMPANY - MPSC DIVISION PURCHASED AND PRODUCED - DOLLARS MONTHS ENDED MARCH 1,2017 Exhibit A- PAGE 1 of 2 CASE NO: U R COST OF GAS w/p LINE BY SOURCE ($) Ref APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH TOTAL 1 Current Month Estimate/Rev wp-jes-1,25,900 84,994 (1,478) 1,,742 (87,729) (587) 2,092,87 (1,780,5) 1,544,54,7,22 (,908,49) (1,997,077) 1,54,78 2 Supplier B wp-jes-2 1,148,428 1,05,18 97,20 889,19 1,291,988 2,04,472 1,21,15 1,59,47 2,000,218 1,575,454 4,02,42 1,079,2 19,079,955 Supplier O wp-jes- 90,772 1,954,40 2,51,50 1,97,17,41,80 2,450,872 2,40,992,51,8 1,80,09 1,579,501,11,2 1,42,411 27,580,949 4 Supplier F wp-jes-4 18,90 552,29 421,442 4, , ,229,72 0 1,270,88 4,749,80 5 Supplier A wp-jes ,20 497,171 4,871 49, ,88 95,57 74,40 1,004,47 1,21,848 1,500,984 42,7 7,54,57 Supplier D wp-jes- 221, ,11,754 1,759,4 1,005,501 1,709,588 1,405,85 1,489,888 2,95,487 1,49,24 1,108,98 14,11,750 7 Supplier I wp-jes Supplier E wp-jes Supplier Q wp-jes-9 20,515 82,598 9, ,44 0 7,88 5,485 1,0,810 1,17,281 2,04,950 27,707 7,428, Supplier C wp-jes ,08,27 211, , ,48 518,48 99,9 1,499,82 8,087 5,829,20 11 Supplier J wp-jes ,427,570 1,0,19 955, ,0 429,0 415, , ,150,797 Supplier M wp-jes- 4,105 72, ,78 87, , ,118,474 1 Supplier B - Klines wp-jes-1 1,98 1, , ,201 1,445 5,41,4 4,844 24,2 14 Local Production wp-jes-14 9,090 9,580 11,0 11,08 14,721,921 9,987 1,111 14,9 15,85 17,777 15,41 155,2 15 BTU/Fuel Alternate Del Points wp-jes Optimization Credits wp-jes-1 (2,01) (8,058) (7,05) (11,480) (14,70) (1,294) (18,977) (41,2) (27,21) (8,72) (85,752) (8,00) (4,05) 17 NNG Imbalance wp-jes- 17 (29,044) 8,27 (21,28) 21,50 17,771 (1,801) (52,5) (11,52) 0 (1,04) 27,518 1,40 (58,840) 18 Other Imbalances wp-jes ,152,719 (,804) (1,802) (,0) 1,58 (14,19) 24,84 (15,7) (4,527) 52,059 (19,149) 92, End User Imbalances wp-jes-19 (18,15) (20,580) (,402) (4,890) (1,5) 4,017 (44,7) (151,2) 4,422 70, ,024 (15,291) 20 End-User Cash Outs wp-jes-20, ,11 22,08 (,558) 0 (,08) (1,250) 28,299 17,9 27,28 1,242 15,00 21 Customer Choice Imbalances wp-jes ,7 222,798 (110,97) (19,40) (9,909),744 2,07 (2,577) (117,9) (95,79) (0,81) 94,17 (49,094) 22 Other wp-jes-22 (10,982) (8,992) 0 (19,55) 2 Trans/Storage Variable Costs wp-jes-2 8,988 98,454 88,27 8,52 81,744 82,97 81,70 100,22 91,08 14,980 11,91 111,982 1,18, Commodity Costs $,49,899 $7,217,55 $,027,408 $7,70,991 $7,54,59 $7,14,459 $9,404,784 $8,27,09 $9,79,982 $14,4,72 $7,191,28 $4,98,289 $95,940, Demand Cost Estimate (BD) wp-jes-24 (1,8,005),005 (100,000) 0 200, ,000 (,85) 1,59,88 (81,549) 4,498 (50,000) (100,000) 225, GLGT Demand Costs (B&D) wp-jes-25 24,2 57,800 57,800 57,800 57,800 57,800 57,800 57,800 29,07 7,1 1,41 20,81 1,988,7 0 NNG Demand Costs (B&D) wp-jes-2 797,7 228,5 17,9 28, ,700 28, ,17 298,088 71,9 71, , ,772 5,505,72 1 PEPL Demand Costs (B&D) wp-jes ,40 241,5 247,77 248,4 248,08 248, , ,05 219,17 228,922 27, ,257 2,851,114 2 ANR Demand Costs (B&D) wp-jes-28 1,025,57 742,44 74, , 74,570 99,57 99,55 941, 1,424,229 75,191 1,42,001 1,405,701 11,827,41 Other Demand Costs (B&D) wp-jes ,197 29, ,00 580,00 580,00 580,00 580,00,759 9,79 9,79 9,79 9,79 8,809,5 4 5 Balancing and Demand Costs $ 1,890,92 $ 1,9,10 $ 1,70,281 $ 1,915,815 $ 2,119,408 $ 2,211,98 $ 2,081,809 $,772,725 $ 2,917,597 $,592,84 $,572,779 $,489,281 $ 1,207, Total Costs $ 8,0,822 $ 9,15,59 $ 7,7,89 $ 9,28,80 $ 9,2,977 $ 9,52,158 $ 11,48,594 $,010, $,57,579 $ 18,029,41 $ 10,74,01 $ 8,475,570 $ 7,147,18

20 Exhibit A- Case No. U R Page 2 of 2 SEMCO ENERGY GAS COMPANY PURCHASED AND PRODUCED - VOLUMES MONTHS ENDED MARCH 1,2017 SUPPLY OF GAS DEKATHERMS APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH TOTAL 1 Current Month Estimate/Rev wp-jes-1 1,772,08 187,977 (08,28) (210,428) 10,728 (152,971) 5,147 (10,72),99 284,80 (1,,09) (18,789) 04,442 2 Supplier B wp-jes-2 55,02 752,259 45,1 452,400 44, ,847 47,580 5,882 1,12, , ,584 22,795 7,98,507 Supplier O wp-jes- 292, ,791 1,19,97 982,222 1,298,9 1,014, ,218 1,75,04 8,881 50,72 922, ,74 10,592,80 4 Supplier F wp-jes-4 1,1 27, ,87 180, , , ,911 1,857,810 5 Supplier A wp-jes ,05 254,82 180,00 170,21 211,577 18, ,81 7,470 79,72 79,721 5,972 2,709,85 Supplier D wp-jes- 19, ,29 5, ,227 2,11 50,1 12,00 914,50 2,518,91 4,2,759 7 Supplier I wp-jes Supplier E wp-jes Supplier C wp-jes , , , ,27 187, ,420 79, ,504 2,10,88 10 Supplier Q wp-jes-10 19,50 75,88, , ,995, ,91 5,50 554, ,000 2,494, Supplier J wp-jes ,7 519, ,5 18,045 18,05 177,141 18, ,45,981 Supplier M wp-jes- 279,04 8, ,10 24, , ,92 1 Supplier B - Klines wp-jes-1 1, ,585 1,550 1,400 7, Local Production wp-jes-14 5,411 5,042 5,02 5,2 5,498 5,148,45 4, 5,9 5,082 4,5 4,2 0, NNG Imbalance wp-jes- 17 (18,95) 4,294 (,254) 7,995,4 (,484) (18,989) (5,1) 0 (4,0) 7,917 4,94 (4,840) 1 Other Imbalances wp-jes-18 49,87 2,251 (2,28) (5,74) (1,101) 9 (4,785) 8,282,828 (21,509) 17,5 (,8) 40, End User Imbalances wp-jes-19 (,055) (,80) (2,14) (11,0) (451) 11, (14,709) (50,444) 14,474 2,57 8 8,008 (5,070) 18 BTU/Fuel Alternate Del Points wp-jes-1 (,72) (2,72) (144) (95) 0 (10) (1) (20) (1,872) (,55) (,154) (,759) (19,255) 19 Fuel to Storage wp-jes-2 (0) (4,9) (17,554) (20,95) (20,245) (20,2) (20,2) (1,8) (2) (90) (5) (92) (1,29) 20 Other wp-jes (50) (50) 21 End-User Cash Outs wp-jes-20,177 24,941 19,89 (51) (1,110) (924) (4,90) 9,29,45 1,028 2,158 9,54 22 Customer Choice Imbalances wp-jes-21 4,879 74,2 (,992) (9,141) (2,0) 4,248 7,89 (859) (9,21) (1,79) (0,271) 1,89 (148,029) 2 24 TOTAL DTH,44,82,50,941,02,249 2,75,201 2,959,190 2,725,911,75,07 2,9,519 2,97,745,59,811 2,19,955 1,9,405 5,2,07

21 SEMCO Energy Gas Company Months Ended March 1, 2017 Interest Calculation Exhibit A-4 CASE NO: U R GCR Gas Over/Under Recovery Interest Calculation Beginning Current Current Balance Balance Over(Under) Month Subject to Over(Under) Recovery Average Interest Interest Monthly 1 MONTH Recovery Exhibit A-1 (Current Mo. X.5) (Beg Bal + Cur Mo. Av Rate Interest 2 Beginning Balance 297,94 4 April 201 $ 297,94 $ 2,5,114 $ 1,2,557 $ 1,29, % $ 1,828 5 May 2,92,508 $ 281, ,22,10, % 27,20 June,24,752 $ (21,725) (115,8),7, % 2,5 7 July,0,027 $ (910,15) (455,078) 2,55, % 22,415 8 August 2,101,871 $ (1,085,11) (542,5) 1,559, % 1,9 9 September 1,01,50 $ (1,195,077) (597,59) 419, %, October (178,517) $ (25,82) (,91) (05,4) 1.85% (479) 11 November (42,49) $ (8,298) (41,49) (77,998) 1.88% (1,19) December (1,115,47) $ 1,88,05 94,0 (421,45) 2.04% (728) 1 January ,958 $ (2,14,220) (1,07,110) (800,152) 2.11% (1,40) 14 February (1,87,22) $ (19,719) (98,0) (1,971,22) 2.17% (,90) 15 March (2,09,981) $,159,774 1,579,887 (490,094) 2.2% (1,088) 1 17 Total $ 1,089,79 $ 98, Total GCR over recovery $1,188, GCC Reservation Charge Over/Under Recovery Interest Calculation Beginning Current Current Balance 29 Balance Over(Under) Month Subject to 0 Over(Under) Recovery Average Interest Interest Monthly 1 MONTH Recovery Exhibit A-1 (Current Mo. X.5) (Beg Bal + Cur Mo. Av Rate Interest 2 Beginning Balance 90,845 4 April ,845 75,854 7,927 8, % $ 1,092 5 May 1,99 (52,) (2,17) 140,5 10.5% 1,22 June 114, (2,4) (1,182) 8, % 70 7 July 52,002 (88,419) (44,209) 7, % 8 8 August (,417) (108,21) (54,11) (90,548) 1.87% (14) 9 September (144,78) (102,779) (51,89) (19,08) 1.8% (299) 40 October (247,457) (4,82) (2,41) (249,798) 1.85% (91) 41 November (252,19) (7,) (18,818) (270,957) 1.88% (418) 42 December (289,775) 197,2 98,1 (191,159) 2.04% (0) 4 January 2017 (92,54) 147,81 7,841 (18,702) 2.11% () 44 February 55,19 7,4,822 58, % March 2,782 48,172 24,08 8, % Total $ 110,95 $ 2, Total GCR B&D under recovery $11,82

22 Exhibit A-5 CASE NO: U R SEMCO ENERGY GAS COMPANY - MPSC DIVISION GCR CALCULATION - PRO-FORMA ACTUALS MONTHS ENDED MARCH 1, LINE APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH TOTAL SOURCES OF GAS 1 PURCHASED AND PRODUCED,18,94,40,577 2,945,29 2,798,42 2,878,882 2,722,10,577,191 2,970,47,285,40,47,024 2,072,194 1,917,50 5,0,90 2 NET (TO) FROM STORAGE 98,718 (1,8,422) (2,1,279) (1,989,94) (2,229,59) (1,957,010) (1,518,2) 284,40,19,025 2,771,72 2,79,40,7,72 52,2 4 TOTAL SUPPLY,417,82 1,474, ,50 808,78 49,4 75,150 2,058,529,254,777,454,455,247,747 4,751,84 5,294,22 5,95,052 5 ADJUST VOLUMES FOR COMPANY USE GAS (1,17) (25,000) (20,7) (27,29) (4,1) (,150) (18,841) (22,54) (21,11) (20,411) (109) (,4) (201,25) 7 LOST AND UNACCOUNTED FOR GAS (21,28) (1,02) (8,872) (8,295) (8,72) (5,941) 45,8 74,029 5,588 (22,75) (18,2) (19,780) 58,28 8 GAS IN KIND 15,05 1,04,22 11,72 14,070 1,15 18,544 18,858 20,254 2,957 22,07 21, , TOTAL SUPPLIES,410,087 1,449,19 71, ,99 50,29 79,224 2,10,870,25,10,519,184,228,558 4,755,478 5,22,21,020,5 1 SALES RATE SCHEDULE SALES (BILLED) 4,182,85 2,857,994 1,48,455 8,44 74,722 72,44 80,44 1,77,894,74,1,844,10,02,099 5,19,717 5,17, UNBILLED - PRIOR MONTH (,148,770) (2,75,992) (97,191) (245,8) (197,5) (11,242) (210,020) (1,48,24) (,04,482) (5,810,5) (5,194,58) (,92,92) (2,707,841) 18 - CURRENT MONTH 2,75,992 97, ,8 197,5 11, ,020 1,48,24,04,482 5,810,5 5,194,58,92,92,992,41 27,551, RATE SCHEDULE SALES (UNBILLED) (772,778) (1,408,801) (721,508) (48,48) (84,09) 9,778 1,27,22 1,551,2 2,775,85 (15,752) (1,27,21) 5,499 84, TOTAL SALES,410,087 1,449,19 71, ,99 50,29 79,224 2,10,870,25,10,519,184,228,558 4,755,478 5,22,21,020, COST OF GAS SOLD ($) PURCHASED AND PRODUCED 8,84,01 8,0,570 7,547,044 9,501,747 9,78,8 9,84,444,14,29 11,424,9 1,28,902 17,72,7 10,255,8 8,25,178 $5,220,5 27 NET (TO) FROM STORAGE 74,91 (,7,45) (4,271,7) (5,472,9) (5,2,288) (5,28,540) ($4,52,175) 59,84 8,005,149,97,148,40,040 8,88,205 2,855,02 28 TRANSPORTATION CREDITS (9,95) (94,752) (50,941) (44,521) (4,815) (7,727) (80,52) (71,751) (81,8) (91,742) (9,9) (7,44) (879,54) 29 (88,29) BOOKED COST OF GAS SOLD 8,0,2 4,55,8,224,40,984,20,9,580 4,024,177 7,71,892 11,922,475 21,210,41 24,217,774 1,798,727 1,84,97 $7,19,411 LESS COST OF GAS FOR 4 COMPANY USE GAS (5,720) (88,49) (7,450) (9,59) (14,54) (21,75) (,51) (79,715) (74,88) (72,205) (8) (117,9) (711,878) 5 LOST AND UNACCOUNTED FOR GAS (75,290) (4,080) (1,85) (29,44) (0,78) (21,017) 11,447 21,881 22,021 (80,42) (4,819) (9,97) 20,7 GAS IN KIND 54,142 4,215 4,271 41,09 49,77 57,185 5,00,711 71,50 84,749 78,095 74,572 7,572 7 PRIOR YEAR OVERRECOVERY (U-148/4-R) (297,94) (297,94) 8 9 TOTAL COST OF GAS SOLD $8,5,950 $4,447,079 $,12,77 $,900,1 $,74,9 $4,08,589 $7,874,288 $,171,52 $21,49,9 $24,149,892 $1,811,17 $1,7,57 $7,7, REVENUES ($) 42 4 MAXIMUM FACTOR PERMITTED 44 FACTOR BILLED TO CUSTOMERS $.992 $.00 $.900 $.510 $.7000 $.7000 $.500 $.521 $.5400 $.5400 $.5400 $.4800 $ BILLED GCR REVENUE $14,218,95 $9,517,0 $5,028,9 $2,925,287 $2,718,471 $2,488,050 $,01,851 $,18,788 $1,251,92 $24,228,857 $21,21,770 $18,084,575 $,1,49 4 UNBILLED GCR REVENUES - PRIOR MONTH (10,70,299) (7,9,05) (,278,777) (82,421) (70,140) (418,995) (7,57) (5,28,471) (10,742,0) (20,58,58) (18,88,824) (1,5,828) (9,21,0) 47 UNBILLED GCR REVENUES - CURRENT MONTH 7,9,05,278,777 82,421 70, ,995 7,57 5,28,471 10,742,0 20,58,58 18,88,824 1,5,828 15,70,975 97,988, TOTAL GCR REVENUE $11,427,149 $4,88,844 $2,,55 $2,79,00 $2,407,2 $2,85,28 $7,548,749 $11,777,8 $2,077,9 $22,049,095 $1,598,774 $19,789,722 $7,801, (UNDER) OVER RECOVERY $,091,198 $4,75 ($550,220) ($1,107,10) ($1,2,80) ($1,202,91) ($25,540) ($9,970) $1,8,515 ($2,100,79) ($2,842) $,05,149 $74, CUMMULATIVE (UNDER) OVER RECOVERY $,091,198 $,527,9 $2,977,744 $1,870,584 $0,781 ($599,180) ($924,720) ($1,18,89) $19,82 ($1,780,970) ($1,99,81) $1,02, $1,02,

23 SEMCO ENERGY GAS COMPANY - MPSC DIVISION PURCHASED AND PRODUCED - PRO-FORMA ACTUAL DOLLARS MONTHS ENDED MARCH 1,2017 Exhibit A- PAGE 1 of 2 CASE NO: U R COST OF GAS w/p LINE BY SOURCE ($) Ref APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH TOTAL Supplier B wp-jes-2 1,05,18 97,20 889,19 1,291,988 2,04,472 1,21,15 1,59,47 2,000,218 1,575,454 4,02,42 1,079,2 529,1 18,40,841 Supplier O wp-jes- 1,954,40 2,51,50 1,97,17,41,80 2,450,872 2,40,992,51,8 1,80,09 1,579,501,11,2 1,42,411 4,95 27,255,10 4 Supplier F wp-jes-4 552,29 421,442 4, ,847-1,229,72-1,270,88 794,272 5,57,148 5 Supplier A wp-jes-5 459,20 497,171 4,871 49, ,88 95,57 74,40 1,004,47 1,21,848 1,500,984 42,7-7,54,57 Supplier D wp-jes ,11,754 1,759,4 1,005,501 1,709,588 1,405,85 1,489,888 2,95,487 1,49,24 1,108,98 852,0 14,747,50 7 Supplier I wp-jes Supplier E wp-jes ,85 55,85 9 Supplier Q wp-jes-9 82,598 9, ,44 0 7,88 5,485 1,0,810 1,17,281 2,04,950 27, ,541 8,002,14 10 Supplier C wp-jes-10-1,08,27 211,704-7, ,48 518,48 99,9 1,499,82 8, ,828, Supplier J wp-jes-11 1,427,570 1,0,19 955, ,0 429,0 415, , ,150,797 Supplier M wp-jes- 72, ,78 87, , ,017 2,1,8 1 Supplier B - Klines wp-jes-1 1, , ,201 1,445 5,41,4 4,844 2,502 24, Local Production wp-jes-14 9,580 11,0 11,08 14,721,921 9,987 1,111 14,9 15,85 17,777 15,41 11, ,11 15 BTU/Fuel Alternate Del Points wp-jes Optimization Credits wp-jes-1 (8,058) (7,05) (11,480) (14,70) (1,294) (18,977) (41,2) (27,21) (8,72) (85,752) (8,00) (45,182) (5,222) 17 NNG Imbalance wp-jes- 17 8,27 (21,28) 21,50 17,771 (1,801) (52,5) (11,52) 0 (1,04) 27,518 1,40 2,40 (,9) 18 Other Imbalances wp-jes-18,719 (,804) (1,802) (,0) 1,58 (14,19) 24,84 (15,7) (4,527) 52,059 (19,149) 47,871 (7,511) 19 End User Imbalances wp-jes-19 (20,580) (,402) (4,890) (1,5) 4,017 (44,7) (151,2) 4,422 70, ,024 (55,575) (52,701) 20 End-User Cash Outs wp-jes ,11 22,08 (,558) - (,08) (1,250) 28,299 17,9 27,28 1,242 17,57 148, Customer Choice Imbalances wp-jes ,798 (110,97) (19,40) (9,909),744 2,07 (2,577) (117,9) (95,79) (0,81) 94,17 491,7 (108,998) 22 Other wp-jes (8,992) 0 0 (8,570) 2 Trans/Storage Variable Costs wp-jes-2 98,454 88,27 8,52 81,744 82,97 81,70 100,22 91,08 14,980 11,91 111, ,458 1,202, Commodity Costs $,52,51 $,4,88 $ 5,707,250 $ 7,1,298 $ 7,15,047 $ 7,11,917 $ 10,018,171 $ 8,195,49 $ 10,724,110 $ 14,099,74 $,98, $ 4,92,79 $ 9,5, Demand Cost Estimate (BD) - 28 (255,49) (14,598) (7,021) (48,958) (48,02) (4,117) (50,81) (98,8) (75,88) (5,45) (27,84) (27,48) (2,154,05) 29 GLGT Demand Costs (B&D) 24,2 57,800 57,800 57,800 57,800 57,800 57,800 57,800 29,07 7,1 1,41 0,400 1,998,254 0 NNG Demand Costs (B&D) 228,5 17,9 28, ,700 28, ,17 298,088 71,9 71, , , ,547 5,448,792 1 PEPL Demand Costs (B&D) 241,5 247,77 248,4 248,08 248, , ,05 219,17 228,922 27, , ,8 2,88,95 2 ANR Demand Costs (B&D) 742,44 74, , 74,570 99,57 99,55 941, 1,424,229 75,191 1,42,001 1,405,701 1,8,479,188,15 Other Demand Costs (B&D) 29, ,00 580,00 580,00 580,00 580,00,759 9,79 9,79 9,79 9,79 9,79 8,727, Balancing and Demand Costs $ 1,851,451 $ 1,59,8 $ 1,89,794 $ 1,870,450 $ 2,0,7 $ 2,072,527 $ 2,8,458 $,228,954 $ 2,52,792 $,272, $,272,01 $,272,8 $ 29,094, $ 8,84,01 $ 8,0,570 $ 7,547,044 $ 9,501,747 $ 9,78,8 $ 9,84,444 $,14,29 $ 11,424,9 $ 1,28,902 $ 17,72,7 $ 10,255,8 $ 8,25,178 $ 5,220,5

24 Exhibit A- PAGE 2 of 2 CASE NO: U R SEMCO ENERGY GAS COMPANY PURCHASED AND PRODUCED - PRO-FORMA ACTUAL VOLUMES MONTHS ENDED MARCH 1,2017 SUPPLY OF GAS DEKATHERMS APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH TOTAL 1 2 Supplier B wp-jes-2 752,259 45,1 452,400 44, ,847 47,580 5,882 1,12, , ,584 22, ,500 7,04,975 Supplier O wp-jes- 790,791 1,19,97 982,222 1,298,9 1,014, ,218 1,75,04 8,881 50,72 922, ,74 147,250 10,447,51 4 Supplier F wp-jes-4 27, ,87 180, , , ,911 7,201 2,07,95 5 Supplier A wp-jes-5 24,05 254,82 180,00 170,21 211,577 18, ,81 7,470 79,72 79,721 5, ,709,85 Supplier D wp-jes ,29 5, ,227 2,11 50,1 12,00 914,50 2,518,91 1,885 4,807,17 7 Supplier I wp-jes Supplier E wp-jes , ,250 9 Supplier C wp-jes , , , ,27 187, ,420 79, , ,10,88 10 Supplier Q wp-jes-10 75,88, , ,995, ,91 5,50 554, ,000 25,22 2,80,08 11 Supplier J wp-jes ,7 519, ,5 18,045 18,05 177,141 18, ,45,981 Supplier M wp-jes- 8, ,10 24, , , ,07 1 Supplier B - Klines wp-jes ,585 1,550 1, ,5 14 Local Production wp-jes-14 5,042 5,02 5,2 5,498 5,148,45 4, 5,9 5,082 4,5 4,2 4,8 59, NNG Imbalance wp-jes- 17 4,294 (,254) 7,995,4 (,484) (18,989) (5,1) 0 (4,0) 7,917 4,94 8,817 (7,28) 1 Other Imbalances wp-jes-18 2,251 (2,28) (5,74) (1,101) 9 (4,785) 8,282,828 (21,509) 17,5 (,8) 15,957, End User Imbalances wp-jes-19 (,80) (2,14) (11,0) (451) 11, (14,709) (50,444) 14,474 2,57 8 8,008 (18,525) (17,540) 18 BTU/Fuel Alternate Del Points wp-jes-1 (2,72) (144) (95) 0 (10) (1) (20) (1,872) (,55) (,154) (,759) (5,297) (20,82) 19 Fuel to Storage wp-jes-2 (4,9) (17,554) (20,95) (20,245) (20,2) (20,2) (1,8) (2) (90) (5) (92) 0 (1,17) 20 Other wp-jes (50) (50) 21 End-User Cash Outs wp-jes-20 24,941 19,89 (51) (1,110) (924) (4,90) 9,29,45 1,028 2,158 11,51 104,90 22 Customer Choice Imbalances wp-jes-21 74,2 (,992) (9,141) (2,0) 4,248 7,89 (859) (9,21) (1,79) (0,271) 1,89 1,911 (18,997) 2 24 TOTAL DTH,18,94,40,577 2,945,29 2,798,42 2,878,882 2,722,10,577,191 2,970,47,285,40,47,024 2,072,194 1,917,50 5,0,91