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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) MARCH 14, 1995
MICHIGAN CONSOLIDATED GAS COMPANY
(Exact name of registrant as specified in its charter)
MICHIGAN 1-7310 38-0478040
State of Incorporation (Commission File (I.R.S. Employer
Number) Identification No.)
500 GRISWOLD STREET, DETROIT, MICHIGAN 48226
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(313) 965-2430
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ITEM 5. OTHER EVENTS
RECENT REGULATORY DEVELOPMENTS
A majority of Michigan Consolidated Gas Company's ("MichCon"), a wholly
owned subsidiary of MCN Corporation ("MCN"), interstate gas supply contracts
are priced based on natural gas spot indices. To mitigate the volatility
associated with gas purchases, MichCon has reserved the right to fix the prices
it pays under some of these contracts. Late in 1993 and at various times during
1994, MichCon fixed the price on approximately 34 Bcf of 1994's gas supply in
advance of the month of purchase in order to capture declining gas prices. Due
to the further decline in gas prices during 1994, MichCon's cost of gas would
have been approximately $10 million lower in 1994 had it not fixed these
prices. Total cost of gas for MichCon in 1994 was $536 million.
Through the Gas Cost Recovery (the "GCR") mechanism, MichCon is allowed to
recover its cost of gas if the Michigan Public Service Commission (the "MPSC")
determines that such costs are reasonable and prudent. MichCon filed its 1994
GCR reconciliation case with the MPSC on February 28, 1995. In this case, the
MPSC will decide whether it believes MichCon's 1994 gas costs were reasonable
and prudent. To date, MichCon's 1994 gas purchase practices have not been
challenged. An order in this case is expected in the last half of 1995. MichCon
believes that, based on the information available at the time, it acted
prudently and reasonably by fixing the prices.
On February 24, 1995, the Administrative Law Judge issued a Proposal for
Decision in MichCon's 1995 GCR plan case (the "PFD"). The PFD recommends that
MichCon propose objective criteria to the MPSC to determine in the future
whether it acts reasonably and prudently when exercising its option to fix
prices under the interstate supply contracts. During 1995, MichCon has not
exercised its right to fix prices under these contracts.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MICHIGAN CONSOLIDATED
GAS COMPANY
By /s/ SUSAN K. MCNISH
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SUSAN K. MCNISH
GENERAL COUNSEL
AND SECRETARY
Date: March 22, 1995
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