For Release: 01/29/2007

Michigan Gas Utilities to Lower Natural Gas Costs

Warmer Than Normal Winter Has Direct Effect On Heating Bills

MONROE, MI, - Officials of Michigan Gas Utilities, a subsidiary of WPS Resources Corporation (NYSE: WPS), announced today that it would reduce natural gas costs 26% for customers, as a result of lower natural gas market prices. "It's important for our customers to understand two things," said Michigan Gas Utilities President Gary Erickson. "This winter starting out being unseasonably warm has dramatically affected the demand for natural gas, resulting in lower prices. Second: Natural gas utilities in Michigan cannot profit on natural gas costs — period. For MGU to lower our gas cost recovery (GCR) is truly a win-win for everyone," he added.

Last fall, forecasters were having a difficult time predicting what type of winter to expect for this heating season. Three full months into winter have resulted in November, December & January being 7%, 21% and 17% respectively, warmer than normal.

The cost decrease will be effective for bills issued on and after the first billing cycle in February. The GCR will be re-evaluated prior to the end of the heating season, which normally runs to April. "Hopefully we will continue with these lower costs until April, yet that will depend on this cold snap," Erickson added.

As a result of the lower wholesale prices, Michigan Gas Utilities has requested a lower GCR, from $.87500 per CCF (one CCF equals 100 cubic feet) to $.65000 per CCF for both residential and commercial customers. The GCR is the largest component of the customer’s gas bill, accounting for about 75-80% of the total bill. MGU's ceiling price which is authorized by the Michigan Public Service Commission is $.95900 per CCF.

To help customers plan more effectively for energy costs, MGU offers its Budget Billing Program. Budget Billing is a level-payment plan in which customers pay the same amount for natural gas each month, based on the average use during the previous 12 months. There is an annual "true-up" in which differences in actual energy use and amounts paid by the customer are balanced. Customers interested in Budget Billing may call 1 800 401-6402 and may visit www.michigangasutilities.com online for further conservation measures.

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