==============================================================================

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                   FORM 10-K

(Mark One)
[ X ]            ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1995, or

[   ]          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

Commission file number 1-10070

                                MCN CORPORATION
            (Exact name of registrant as specified in its charter)

            Michigan                                         38-2820658
(State or other jurisdiction of                           (I.R.S. Employer
 incorporation or organization)                          Identification No.)

 500 Griswold Street, Detroit, Michigan                             48226
(Address of principal executive offices)                          (Zip Code)
                

Registrant's telephone number, including area code  313-256-5500

Securities registered pursuant to Section 12(b) of the Act:

<TABLE>
<CAPTION>
                                                     Name of each Exchange
               Title of each class                    on which registered
               -------------------                   ---------------------
<S>                                                 <C>  
Common Stock, $.01 Par Value Per Share              New York Stock Exchange

9-3/8% Cumulative Preferred Securities, Series A*   New York Stock Exchange
<FN>
----------------
* Issued by MCN Michigan Limited Partnership. The payments of dividends and
  payments on liquidation or redemption are guaranteed by MCN Corporation.
</TABLE>

Securities registered pursuant to Section 12(g) of the Act:
None

      Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.  Yes __ X __   No _______

      Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendments to this Form 10-K. ________

      The aggregate market value of MCN Corporation Common Stock, $.01 par
value per share, held by non-affiliates as of February 26, 1996 was $1.628
billion based on 66,776,428 outstanding shares and the closing price on that
day (New York Stock Exchange Composite Transactions).

                      Documents Incorporated by Reference:

      Portions of MCN's 1995 Annual Report to Shareholders are incorporated by
reference in Part II, Items 5,6,7 and 8 and portions of MCN's February 1996
definitive Proxy Statement are incorporated by reference in Part III.

==============================================================================

<PAGE>
                           KEY TO ABBREVIATED TERMS

Antrim Gas .............. Natural gas produced from shallow wells in the
                          Devonian (Antrim) shale formations.

Base Pressure ........... Pressure at which measurements of a volume
                          of gas are measured. MCN's common base pressure is
                          14.65 pound per square inch absolute.

Bcf ..................... One billion cubic feet, which is a unit of
                          measurement of gas volume. 1 Bcf = 1,000 MMcf. To
                          determine the Bcf equivalent (Bcfe) for oil,
                          multiply the number of barrels (in millions) by
                          six.

BTU ..................... British Thermal Unit; the amount of heat required
                          to raise the temperature of one pound of water one
                          degree Fahrenheit. One cubic foot of natural gas
                          contains approximately 1,000 BTUs.

Capital Investments ..... MCN's consolidated capital expenditures
                          plus acquisitions and MCN's share of capital
                          expenditures of joint ventures, less the minority
                          partners' share of consolidated capital
                          expenditures.

Citizens ................ Citizens Gas Fuel Company; a wholly-owned natural
                          gas distribution subsidiary of MCN Corporation.

Coalbed Methane ......... Natural Gas formed during the coalification
                          of plant material into coal. Drilling a well into
                          the coal and dewatering the coal seam will cause a
                          reduction in pressure, releasing natural gas.

CoEnergy Trading Company  A wholly-owned gas marketing
                          subsidiary of MCN Investment.

Cogeneration ............ The production of two forms of energy, usually
                          steam and electricity, from a single fuel source
                          such as natural gas.

Degree Days ............. A measure of the coldness of the weather based
                          on how much the day's average temperature is below
                          65 degrees Fahrenheit.

Diversified Energy group  MCN's exploration and production, gas
                          gathering and processing, gas storage, gas
                          marketing, cogeneration and computer operations
                          services businesses.

End User Transportation   A gas delivery service provided
                          to large-volume commercial and industrial customers
                          who purchase natural gas directly from producers or
                          brokerage companies for the customers' own use.


                                      ii

<PAGE>


                           KEY TO ABBREVIATED TERMS
                                 (continued)


FERC .................... Federal Energy Regulatory Commission; a federal
                          agency that determines the interstate rates and
                          regulations of interstate pipelines.

Gas Gathering ........... The process of collecting gas from gas
                          wells and then transporting the gas through
                          pipelines to processing plants or major pipelines.

Gas Processing .......... The removal of various components from
                          natural gas to meet market quality standards.

Gas Storage ............. The process of injecting and withdrawing
                          natural gas from a depleted underground natural gas
                          field or salt cavern.

GCR ..................... Gas Cost Recovery; a process by which MichCon,
                          through annual gas cost proceedings before the
                          Michigan Public Service Commission, can recover the
                          prudent and reasonable cost of gas sold.

The Genix Group ......... The wholly-owned subsidiary of MCN
                          Investment Company providing computer and related
                          outsourcing services.
Intermediate
Transportation .......... A gas delivery service provided to gas producers, 
                          gas brokers and other gas companies that own the 
                          natural gas, but are not the ultimate consumers.

Mcf ..................... One thousand cubic feet, which is a unit of
                          measurement of gas volume.

MCN ..................... MCN Corporation and its subsidiaries.

MCN Investment .......... MCN Investment Corporation, a wholly-owned 
                          subsidiary of MCN Corporation and the holding 
                          company of MCN's Diversified Energy groups 
                          subsidiaries.

MichCon ................. Michigan Consolidated Gas Company; a wholly-owned
                          natural gas distribution and intrastate
                          transmission subsidiary of MCN Corporation.

Minority Interest ....... The minority partners' share of a project,
                          such as the Saginaw Bay project.

MMcf .................... One million cubic feet, which is a unit of
                          measurement of gas volume. 1 MMcf = 1,000 Mcf.

MPSC .................... Michigan Public Service Commission; the regulator
                          of intrastate aspects of the natural gas industry
                          within the State of Michigan.


                                     iii


<PAGE>
                           KEY TO ABBREVIATED TERMS
                                 (concluded)


Normal Weather .........  The average daily temperature within MCN's
                          Gas Distribution service area during a recent
                          30-year period.

Order No. 636 ..........  An order issued in 1992 by the FERC, with subsequent
                          related orders, requiring interstate pipeline
                          companies to separate or unbundle their various
                          pipeline services.

Saginaw Bay  ...........  Saginaw Bay Pipeline Company and Saginaw Bay Lateral
                          Company; wholly-owned gas gathering subsidiaries of
                          MichCon.

Spot Market ............. Buying and selling natural gas on a
                          short-term basis, typically monthly.

Transition Costs  ......  Costs incurred by interstate pipeline
                          companies under FERC Order No. 636 to reduce or
                          eliminate gas supply related obligations.


                                      iv

<PAGE>
                               TABLE OF CONTENTS

                                                                      Page
 Contents                                                            Number
 --------                                                          ----------
Part I
  Item 1.    Business ............................................      1
  Item 2.    Properties ..........................................     16
  Item 3.    Legal Proceedings ...................................     18
  Item 4.    Submission of Matters to a Vote of Security Holders .     18
             Executive Officers of the Registrant ................     19

Part II
  Item 5.    Market for Registrant's Common Equity and Related
             Stockholder Matters .................................     20
  Item 6.    Selected Financial Data .............................     20
  Item 7.    Management's Discussion and Analysis of Financial
             Condition and Results of Operations .................     20
  Item 8.    Financial Statements and Supplementary Data .........     20
  Item 9.    Changes in and Disagreements with Accountants on
             Accounting and Financial Disclosure .................     20

Part III
  Item 10.   Directors and Executive Officers of the Registrant ..     21
             Compliance with Section 16(a) of the Securities
             Exchange Act of 1934, as amended ....................     21
  Item 11.   Executive Compensation ..............................     21
  Item 12.   Security Ownership of Certain Beneficial Owners and
             Management ..........................................     21
  Item 13.   Certain Relationships and Related Transactions ......     21

Part IV
  Item 14.   Exhibits, Financial Statement Schedule, and Reports
             on Form 8-K .........................................     21

Signatures .......................................................     26


                                      v

<PAGE>
                                     PART I

ITEM 1. BUSINESS

      MCN Corporation (MCN) is a diversified natural gas holding company. Its
principal operating subsidiaries are Michigan Consolidated Gas Company
(MichCon), a natural gas distribution and intrastate transmission company; and
MCN Investment Corporation, (MCN Investment) a subholding company for various
energy businesses and a computer operations management firm. MCN, a Michigan
corporation organized in 1988, is exempt from most provisions of the Public
Utility Holding Company Act of 1935. The operating revenues, operating
income, and identifiable assets of MCN's business segments are included in the
financial statements, incorporated by reference in Item 8, "Financial
Statements and Supplementary Data," on page 20. At December 31, 1995, MCN and
its subsidiaries had 3,777 employees.

BUSINESS SEGMENTS

      MCN's major business segments are Gas Distribution and, within the
Diversified Energy group, Gas Services and Computer Operations Services.

Gas Distribution operates the largest natural gas distribution and intrastate
transmission system in Michigan and one of the largest in the United States.
This segment includes the following companies:

      MichCon -- A Michigan corporation organized in 1898 that, with its
      predecessors, has been in business for nearly 150 years. MichCon is a
      public utility, engaged in the distribution and transmission of natural
      gas in the State of Michigan serving 1.2 million residential, commercial
      and industrial customers.

      Citizens -- A Michigan corporation organized in 1951 that, with its
      predecessors, has been in business for more than 135 years. Citizens is
      a gas utility that conducts all of its business in the State of Michigan
      serving 13,000 residential, commercial and industrial customers.

Gas Services is an integrated energy group with investments in: exploration
and production, gas gathering and processing, gas storage and gas marketing
and cogeneration.

Computer Operations Services is the largest Michigan-based computer operations
management firm and one of the leading computer services providers in the
United States. The Genix Group provides computer management, data processing
and related services to approximately 100 corporate clients.


                                      1

<PAGE>
                                GAS DISTRIBUTION

Gas Sales and Transportation

      Gas Distribution serves customers in the Detroit, Grand Rapids, Ann
Arbor, Traverse City, Muskegon and Adrian metropolitan areas and in various
other communities throughout the State of Michigan. The following services are
provided by Gas Distribution:

  *   Gas Sales -- Includes the marketing and delivery of natural gas to
      residential, commercial and industrial customers.

  *   End User Transportation -- Through this service, large volume customers
      that purchase gas directly from producers or marketers utilize the
      company's gas distribution network to transport the gas to their
      facilities.

  *   Intermediate Transportation -- Gas Distribution also provides
      transportation service within Michigan to pipelines, gas marketers,
      producers and other local distribution companies that own the natural
      gas, but are not the ultimate consumer.

      In January 1996, MCN consolidated its northern Michigan pipeline
operations through the transfer of its Michigan gathering and transportation
network from its Diversified Energy group to its Gas Distribution group. The
transfer was made in order to unify MCN's Michigan gathering pipeline
activities within one business unit. The segment information included herein
is reported as though the combined intrastate pipeline operations were part of
Gas Distribution for all periods presented. 
<TABLE> 
<CAPTION>
                                                     1995       1994       1993
                                                     ----       ----       ----
<S>                                                <C>        <C>        <C>     
Revenues (In millions of dollars)
Gas Sales ......................................   $  931.9   $  969.0   $  979.9
End User Transportation ........................       80.8       76.5       71.7
Intermediate Transportation ....................       42.0       39.4       31.4
                                                   --------   --------   --------
    Total Sales and Transportation .............    1,054.7    1,084.9    1,083.0
                                                   --------   --------   --------
Conservation Programs, Storage Service and other       52.9       52.1       58.5
                                                   --------   --------   --------
    Total Operating Revenues ...................   $1,107.6   $1,137.0   $1,141.5
                                                   ========   ========   ========
Markets (Bcf)
Gas Sales ......................................      209.8      204.4      205.4
End User Transportation ........................      145.8      140.0      128.6
Intermediate Transportation ....................      374.4      323.0      302.7
                                                   --------   --------   --------
    Total Sales and Transportation .............      730.0      667.4      636.7
                                                   ========   ========   ========
</TABLE>

Note: Intermediate transportation volumes include intercompany transactions.

      Effect of Weather: Gas Distribution's sales and end user transportation
volumes, revenues and net income are impacted by the weather. Given the
seasonal nature of the business, revenues and net income tend to be higher in
the first and fourth quarters of the calendar year.

<TABLE>
<CAPTION>
Effect of Weather on Gas Markets and Earnings
------------------------------------------------------------------------------
                                            1995       1994       1993
                                            ----       ----       ----
<S>                                        <C>       <C>        <C>      
  Percentage Colder (Warmer) than Normal       0.3%      (4.2)%     (2.2)%
  Increase (Decrease) from Normal in:
    Gas Markets (in Bcf)                       1.5       (4.4)      (4.3)
    Net Income (in Millions)               $   1.4   $   (4.0)  $   (3.7)
</TABLE>


                                      2

<PAGE>
      Gas Sales: Revenues declined by $37.1 million in 1995 due to the
pass-through to customers of lower cost of gas purchased. This market
represents 29% of total deliveries and produced 77% of Gas Distribution's
gross profit margin from sales and transportation services (Gross Profit
Margin). The average margin per Mcf from gas sales in 1995 was $2.10. A
majority of the sales to the approximately 18,000 net increase in customers 
were offset by lower consumption per customer, primarily related to the 
installation of more energy efficient equipment.

      Competition in the gas sales market comes primarily from alternative
fuels such as electricity, propane, and to a lesser degree, oil and wood, and
in a few areas from other natural gas providers. Natural gas continues to be
the preferred fuel for Michigan residences and businesses. Nearly every
residential and commercial developer in MichCon's service territories selects
natural gas in new construction because of the convenience, cleanliness and
price advantage of natural gas compared to propane, fuel oil and other
alternative fuels. Service and price are the primary factors affecting this
market.

      Gas Distribution continues to focus on the needs of customers and the
marketplace in order to position itself as the preferred provider of 
natural gas within Michigan. To accomplish this, MichCon will increase 
efforts to reduce cost of gas and operating costs, and will take 
advantage of growth opportunities to expand to new geographic areas. 
For example, Gas Distribution offers the financing of distribution lines 
and gas appliances to encourage potential customers to utilize natural gas. 
Offering a variety of gas-related services, such as appliance repair 
and equipment leasing, should also increase MichCon's penetration into 
existing markets.

      Gas Distribution continues its commitment to maintain low gas costs.
During 1995, its annual average cost of gas rate of $2.36 per Mcf was at the
lowest level since 1979, meeting its objective of being in the lowest quartile
for costs of gas in Michigan as well as neighboring states. In addition, Gas
Distribution is continuously striving to reduce the cost of operating the
business. In 1994, MichCon aligned its operations along core business
processes to make the company more efficient, competitive and customer
focused.

      Gas Distribution's Area Expansion Program (AEP) is intended to spur
demand for natural gas in areas currently not served, primarily in the
residential and small commercial markets. By financing the cost of main
extensions, this program makes it easier for users of other higher cost fuels,
such as propane and fuel oil, to consider using natural gas for space heat and
other appliances. The AEP, which reaches rural and developing areas not
currently using natural gas, has contributed to the 18,068, 12,559 and 11,821
net increases in customers in 1995, 1994 and 1993, respectively. In 1995, 17
new areas of Michigan were served by MichCon, bringing to 117 the total number
of new areas added since 1984.

      Gas Distribution's market share for residential heating customers in the
communities in which it serves is approximately 85%. While this saturation
rate is high, there continues to be significant growth opportunities through
conversion of existing homes as well as from new construction. Gas
Distribution continues to grow the industrial and commercial markets by
aggressively facilitating the use of existing gas technologies and equipment.

      During 1995, MCN agreed to acquire a 47.5% interest in a partnership
formed to construct, own and operate a natural gas transmission and
distribution system located in southern Missouri. The agreement is subject to
MCN obtaining assurance from the Securities and Exchange Commission that the
acquisition is consistent with its exemption under the Public Utility Holding
Company Act of 1935. Construction of the system, which began in March 1995, is
planned to be completed in three phases by early 1997 at a cost of
approximately $40 million. Initial operations began during November 1995 when
construction of the first phase was completed. The 475 mile pipeline system,
when completed, is expected to provide service to approximately 10,000
customers.

      End User Transportation: End user transportation deliveries increased in
1995 due to a higher level of usage by large-volume commercial and industrial
customers. Additional deliveries to gas cogeneration facilities and colder
weather also contributed to the increased deliveries. In 1995, this market
accounted for 20% of total gas deliveries and produced 15% of Gross Profit
Margin.


                                      3

<PAGE>

      At December 31, 1995, Gas Distribution had end user transportation
agreements representing annual volumes of 143 Bcf. Approximately 69% of these
volumes are under contracts that extend to 1997 or beyond and include
virtually all of the large, and most price sensitive, customers. The contracts
for the remaining volumes are typically one-year contracts that expire at
various times during 1996 and relate to a large number of low volume
users with relatively low price sensitivity. Negotiations have commenced with
customers whose contracts expire in 1996.

      Through technical and financial assistance, customers have been
encouraged to increase the use of natural gas in their industrial and
commercial facilities. Gas-fueled cogeneration has been an expanding market
for natural gas. In 1995, this market accounted for approximately 24 Bcf of
gas deliveries. Air compressors and other small engines in certain commercial
applications also provide possibilities for conversion to natural gas-powered
equipment. The efficiencies and price competitiveness of natural gas can
significantly reduce operating costs for customers, even though a higher
initial outlay for gas-burning equipment may be required.

      The primary focus of competition in this market is total cost of fuel.
Some large commercial and industrial customers have the capacity to switch to
alternative fuel sources including coal, electricity, oil and steam. In
addition, some of these customers could bypass Gas Distribution's system and
obtain service directly from a pipeline company. However, cost differentials
must be sufficient to offset the substantial investment costs and risk
associated with fuel switching or bypass. Gas Distribution competes against
alternative fuel sources by providing competitive pricing and reliable supply
through the use of the company's extensive storage capacity and multiple
supply sources. Almost all significant customers that are in proximity to
pipeline facilities are under long-term contracts.

      In the past several years, Gas Distribution has been successful in
converting many customers' facilities to natural gas from alternative fuels
and in retaining those customers after conversion. Also, in the past several
years, Gas Distribution has not experienced any fuel switching of any
significance by its customers. In 1995, approximately 27 Bcf of MichCon's
transportation deliveries were to customers who displaced coal with natural
gas.

      End user transportation expanded further in 1995 with the completion of
the Michigan Power cogeneration facility. During the third quarter of 1994,
MCN Investment and Destec Energy began construction of a 123 megawatt
cogeneration plant in Ludington, Michigan. In October 1995, the plant was
completed and MichCon began providing end user transportation of the natural
gas needed to fuel the plant, approximately nine Bcf annually.

      Intermediate Transportation: This service accounts for 51% of total gas
volumes, but, due to the lower rate charged for this service, represents only
8% of Gross Profit Margin.

      Gas Distribution's extensive transmission pipeline system has enabled it
to increase the volumes transported for Michigan gas producers, ANR Pipeline
Company (ANR) and other shippers. Gas Distribution operates in a pivotal
geographic location with links to major interstate pipelines that reach
markets elsewhere in the Midwest, the eastern United States and eastern
Canada. In 1995, transportation volumes increased due to additional volumes
transported for ANR and increased transportation of Antrim gas for Michigan
gas producers and brokers.

      Saginaw Bay Pipeline Company and Saginaw Bay Lateral Company
(collectively "Saginaw Bay") are general partners in ventures that transport
natural gas and natural gas liquids from east-central Michigan gas fields to
processing plants in the northern part of the state. During 1995, the Saginaw
Bay pipeline transported an average of 58.1 MMcf of natural gas per day and
related liquids. Gas volumes transported on the Saginaw Bay pipeline have
declined over the past several years as production of the Prairie du Chien
reserves begin their normal decline. Effective in January 1996, the
transportation rate of one customer will decrease 40% in accordance with the
terms of a 15-year contract that reduces the transportation rate for the last
ten years of the agreement. Revenues from the customer subject to the rate
decrease totaled $6.0 million in 1995. Gas Distribution will continue to look
at new sources of volume and revenue to increase the profitability of this
asset.


                                      4


<PAGE>
      There has been a significant increase in Michigan Antrim gas production
over the past few years, resulting in a growing demand by gas producers and
brokers for intermediate transportation services. Intermediate transportation
deliveries have almost tripled since 1991, and have resulted from time to
time in capacity constraints on MichCon's northern Michigan pipeline system.
In order to meet the increased demand, MichCon filed a proposal before the
MPSC in 1994 to construct facilities to expand transportation capacity. In
March 1995, the MPSC approved MichCon's proposal. Construction of the 65 mile
pipeline began during the 1995 second quarter and will be completed by June
1996. The expansion project will total approximately $40 million for
additional pipeline and related facilities and is expected to transport
approximately 135 Bcf of Antrim gas annually, generating new revenues of
approximately $8 million per year. In addition, MCN's Diversified Energy group
will invest in new gas processing facilities related to the expansion.

      In June 1995, the MPSC approved MichCon's request to construct and
operate a 59-mile loop of the Milford-to-Belle River Pipeline for
approximately $80 million. The pipeline will improve the overall reliability
and efficiency of MichCon's gas storage and transportation system and will
enable MichCon to expand its intermediate transportation capabilities.
Construction of the pipeline is expected to be completed in early 1997.

Energy Assistance and Conservation Programs

      Energy assistance programs funded by the federal government and the
state of Michigan, including the Home Heating Credit for low-income customers
and the Department of Social Services' (DSS) Heating Assistance Program,
remain critical to MichCon's ability to control its uncollectible expenses.
MichCon has historically obtained favorable regulatory treatment of its
uncollectible costs, including those related to these energy assistance
programs.

      MichCon receives a significant amount of its heating assistance funding
from the Low-Income Home Energy Assistance Program (LIHEAP). Congress has
reduced a substantial portion of the program's funding for the 1996 fiscal
year, and there are proposals to eliminate all program funding in future
years. Michigan's share of LIHEAP funds were reduced from $78 million in
fiscal year 1995 to $47.5 million in 1996. During 1995 and 1994, $27.3 million
and $27.0 million in LIHEAP funds assisted approximately 112,000 and 131,000
MichCon customers, respectively. A portion of the decreased funding may result
in increased uncollectibles expense. MichCon is currently working with federal
and state officials to identify ways to obtain energy assistance for
low-income customers from other avenues, and is taking actions to minimize any
impact that reductions in LIHEAP funding would have on MCN's financial
statements.

      In September 1994, MichCon filed for MPSC approval to implement its
three-year, $26 million Demand Side Management Plan (DSM Plan). The DSM Plan
included proposals for continuation of several energy conservation programs
targeted at low-income customers and several innovative programs intended to
help other MichCon customers reduce their energy costs. MichCon intended to
implement its surcharge-funded DSM Plan by October 1995. In its order issued
in November 1995, the MPSC rejected the plan and found that MichCon's energy
conservation program surcharge should be discontinued.

Gas Supply

      MichCon obtains its natural gas supply from various sources in different
geographic areas under agreements that vary in both pricing and terms. This
geographic and contractual diversity of supply ensures that MichCon will be
able to meet the requirements of its present and future customers with
reliable supplies of natural gas at competitive, market responsive prices.
Citizens is currently served by two interstate pipelines, Panhandle Eastern
Pipe Line Company (Panhandle) and ANR. Westside Pipeline Company (Westside),
an affiliate intrastate pipeline company, connects ANR to Citizens'
distribution system. Citizens has firm transportation contracts with ANR and
Westside that provide daily quantities sufficient to meet the needs of
Citizens' firm customers. Citizens purchases gas from suppliers who have firm
transportation agreements with Panhandle. During 1995, Citizens' purchases
were 97% from an affiliated company that had access to long-term supplies and
3% from other non-affiliated suppliers.


                                      5

<PAGE>

      One of MCN's objectives for its Gas Distribution businesses is to rank
in the lowest quartile for cost of gas in Michigan and neighboring states. As
a result of efforts to lower its cost of gas, including extensive contract
renegotiations, increased use of spot market-priced purchases and the use of
available storage, Gas Distribution's gas costs declined to $2.36 per Mcf in
1995, a reduction of 11% from 1994. Gas Distribution's gas costs have
decreased 45% in the last ten years. 

<TABLE> 
<CAPTION>
Gas Distribution -- Sources of Gas Supply (Bcf)
------------------------------------------------------------------------------
                                  1995     1994     1993
                                ------   ------   ------
<S>                             <C>      <C>      <C>  
  Firm Suppliers:
      Michigan Producers ....     90.9     86.0     92.7
      Interstate Suppliers ..     18.2     64.3     80.4
      Canadian Suppliers ....     31.5     29.4     15.4
  Spot Market ...............     55.1     37.2     13.1
                                ------   ------   ------
                                 195.7    216.9    201.6
                                ======   ======   ======
</TABLE>

      Gas Distribution purchased 47% of its 1995 supply from Michigan
producers, 37% from producers in the southern and midcontinent regions of the
United States and 16% from Canadian producers. These supplies are complemented
by 130 Bcf of working storage capacity from storage fields owned and operated
in Michigan.

      The 1995 and 1994 increases in volumes associated with Spot Market are
due to the subsequent discontinuance of MichCon purchases of gas from ANR as a
result of FERC Order No. 636, as discussed below.

      FERC Order No. 636: In 1992, the FERC issued Order No. 636 which
required interstate pipelines to separate their pipeline sales service into
its various service components. The order also permitted interstate pipelines
to recover their prudently incurred transition costs resulting from
restructuring. As a result of ANR's FERC Order No. 636 restructuring, its
long-term relationship with MichCon changed significantly. MichCon no longer
purchases natural gas supply directly from ANR, but instead utilizes ANR
solely as a transporter of gas. MichCon purchases gas directly from producers
and marketers with access to natural gas supplies in Texas, Oklahoma,
Louisiana and Canada.

      In November 1993, ANR, MichCon's primary interstate natural gas
transporter, implemented its FERC Order No. 636 service restructuring. ANR
discontinued its merchant function and modified its rates to reflect the
Straight Fixed/Variable rate design (SFV) mandated by Order No. 636. Under
SFV, pipelines recover fixed costs through monthly demand charges based upon
capacity entitlement and recover only variable costs through volume-sensitive
commodity charges. SFV significantly increases costs to many weather-sensitive
local distribution companies who do not have on-system storage capacity. In
contrast, through the use of its extensive underground storage facilities,
MichCon has been able to lower its pipeline transportation requirements
thereby minimizing pipeline fixed charges.

      During 1995 and 1994, ANR filed several requests for recovery of these
transition costs. MichCon accrued its portion of these costs totaling $6.8
million and $5.4 million, of which $5.0 million and $3.9 million are reflected
in cost of gas, in 1995 and 1994, respectively. The MPSC has held that these
transition costs are recoverable through the GCR mechanism as paid and,
therefore, a regulatory asset has been recorded for the unrecovered costs. As
periodic filings are made by ANR, MichCon will accrue its allocated portion.
It is management's belief that the transition costs will have no significant
effect on MCN's financial statements.

      General Supply: To ensure continuous, uninterrupted service to
customers, MichCon has in place long-term firm transportation agreements with
ANR and Great Lakes Gas Transmission Limited Partnership (Great Lakes). ANR is
obligated to transport approximately 395 MMcf per day of supply for MichCon
under these agreements, while Great Lakes is obligated to transport 30 MMcf
per day. These transportation contracts expire on various dates between 1999
and 2011.


                                      6

<PAGE>
      MichCon also has contracts with independent Michigan producers that
expire on various dates through 2009. A portion of these contracts expire in
1996. MichCon has begun discussions with several producers to limit the cost
of gas purchases after 1996.

      In 1993, Panhandle refunded to MichCon the costs of certain 
direct billings totaling $5.4 million plus interest of $4.4 million in 
compliance with a FERC order. During 1994, the FERC issued an order 
permitting Panhandle to seek reimbursement of the $4.4 million in 
interest from MichCon. MichCon's request for rehearing of the 1994
order was denied. MichCon has appealed the issue to the D.C. Circuit Court. If
MichCon is ultimately unsuccessful in defeating Panhandle's claim, it is
anticipated that these costs will be recoverable through the GCR mechanism
and, therefore, a regulatory asset has been recorded for their future
recovery.

      At December 31, 1995, MichCon owned and operated five natural gas
storage fields in Michigan with a working storage capacity of approximately
130 Bcf. These facilities play an important role in providing reliable and
cost-effective service. MichCon uses its storage capacity to supplement its
supply during the winter months, replacing the gas in April through October
when demand is at its lowest. The use of this storage capacity also allows
MichCon to lower its peak day entitlement, thereby reducing interstate
pipeline costs. During 1995, MichCon's maximum one-day sendout exceeded 2.2
Bcf, of which approximately 70% came from its underground storage fields.
MichCon's gas distribution system has a maximum daily sendout capability of
2.7 Bcf, with approximately 70% coming from underground storage. MichCon also
sells a portion of its natural gas storage capacity to an affiliated company
and third parties.

Regulation and Rates

      MichCon is subject to the jurisdiction of the MPSC as to various phases
of its operations, including gas sales rates, service and accounting. Citizens
rates are set by the Adrian Gas Rate Commission, a municipal commission. Other
various phases of its operations are subject to the jurisdiction of the MPSC.
Both MichCon and Citizens are subject to the requirements of other regulatory
agencies with respect to safety, the environment and health.

      Michigan offers an environment of progressive and reasonable rate
regulation. This is evident by the efforts underway to change the current form
of regulation. In January 1996, the Governor of Michigan submitted to the MPSC
his recommendations for utility reform, designed to make Michigan more
competitive in energy costs. If the Governor's recommendations are adopted,
the current form of regulation, based on rate of return and cost of service,
may be replaced by a form that is based on price caps or other incentives. The
proposed form of regulation is consistent with a competitive environment and
would promote efficient and cost-effective products and services. The gas
industry is moving towards the unbundling of locally provided gas services. If
this occurs, all customers, including those at the residential level, may be
able to choose their own gas supplier while Gas Distribution continues to move
the gas to the ultimate user. Gas Distributions' efficient operations and well
managed gas supply portfolio will prepare it to take full advantage of this
opportunity. As the MPSC evaluates expanded competition for the electric and
natural gas industries within the State, MichCon will continue its active
involvement.

      General Rate Proceedings: In October 1993, MichCon received approval
from the MPSC in its general rate case to increase rates $15.7 million
beginning in January 1994. The higher rates include $28.7 million for retiree
health care benefits recognized under new accounting requirements and $8.1
million for higher depreciation rates. Additionally, the MPSC's decision
lowered MichCon's allowed rate of return on common equity to 11.5%. This was
consistent with other rate of return percentages being authorized for local
distribution companies in the United States during 1993.

      In addition, MichCon received authorization to defer manufactured gas
plant (MGP) investigation and remediation costs in excess of the $11.7 million
previously reserved by MichCon. The remaining balance of this initial reserve
at December 31, 1995 is approximately $3.5 million. Any excess costs are to be
amortized over a ten year period beginning in the year subsequent to the year
environmental investigation and remediation costs are paid. The recovery of
any remediation costs incurred will be reviewed in a future rate case.


                                      7

<PAGE>
      In June 1994, the MPSC approved the property tax stipulation and
settlement agreement which addresses the treatment of reduced state property
tax and increased state sales tax and federal income tax. The estimated net
decrease in MichCon's operating expense was approximately $4.0 million for
1994 and $6.2 million annually thereafter. The agreement allows MichCon to
accelerate the amortization of its 1993 deferred costs associated with the
implementation of Statement of Financial Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pension," by the
net decreased tax expense.

      In 1994, Citizens entered into a new rate agreement with the municipal
commission that sets Citizens' rates. Under the terms of this agreement,
Citizens received a 3% rate increase and will freeze its rates for five years.
This rate increase is Citizens' first rate increase in ten years. The new rate
agreement, which went into effect in January 1995, will provide Citizens'
customers with known prices and the company with an opportunity to control
costs and continue to earn a reasonable rate of return.

      Gas Cost Recovery: The GCR process allows MichCon to recover its cost of
gas sold if the MPSC determines that such costs are reasonable and prudent.
This determination includes an annual Gas Supply and Cost Review, in which the
MPSC approves maximum monthly GCR factors. A subsequent annual GCR
reconciliation proceeding provides a review of gas costs incurred during the
year, determines whether approved gas costs have been overcollected or
undercollected and, as a result, whether a refund or surcharge, including
interest, is required.

      In May 1994, the MPSC issued an order in MichCon's 1993 GCR
reconciliation case approving a partial settlement allowing MichCon to refund
$11.6 million to its natural gas customers on their June 1994 bills. The
refund consisted primarily of supply realignment overcollections and excess
transportation and storage revenues, partially offset by 1993 GCR
undercollections. In September 1994, the MPSC approved the final settlement,
which provides for additional refunds of $0.4 million applicable to GCR sales
customers and $0.1 million applicable to transportation customers.

      In February 1995, MichCon filed its 1994 GCR reconciliation case
indicating an over-recovery of $19 million, including interest, which will be
returned to GCR customers using the new rolled-in prospective refunding
methodology approved by the MPSC on June 30, 1994. In February 1996, the MPSC
issued an order finding that all of MichCon's 1994 gas costs were reasonable
and prudent, and made no disallowance of gas costs as a result of MichCon
fixing gas prices on a portion of its gas purchases.

      In February 1996, MichCon filed its 1995 GCR reconciliation case
indicating an under-recovery of less than $0.1 million, including interest,
which will be collected from GCR customers using the new rolled-in prospective
refunding methodology. In July 1995, MichCon filed its 1996 plan case. An MPSC
order is expected in the first half of 1996.

Environmental Matters

      Manufactured Gas Plants: Prior to the construction of major natural gas
pipelines, gas for heating and other uses was manufactured from processes
involving coal, coke or oil. MichCon and Citizens own or previously owned 17
former MGP sites.

      During the mid-1980s, MCN conducted preliminary environmental
investigations at these former MGP sites, and some contamination related to
the byproducts of gas manufacturing was discovered at each site. The existence
of these sites and the results of the environmental investigations have been
reported to the Michigan Department of Environmental Quality. None of these
former MGP sites are on the National Priorities List prepared by the U.S.
Environmental Protection Agency.

      MCN is not involved in any administrative proceedings regarding these
former MGP sites. MCN is currently remediating a former MGP site in Muskegon,
Michigan. The remedy consists of limited excavation and disposal of soils, a
new soil cover and, if necessary, a ground water capture and treatment system.
MCN is also conducting more extensive investigations at three other former MGP
sites.


                                      8


<PAGE>

      MCN has employed outside consultants to evaluate remediation
alternatives at these sites, to assist in estimating its potential liabilities
and to review its archived insurance policies. MCN notified more than 50
current and former insurance carriers of the environmental conditions at these
former MGP sites and requested insurance coverage for costs associated with
the investigation and remediation of these sites. MCN is pursuing its claims
against these carriers. The findings of these investigations indicate that the
estimated total expenditures for investigation and remediation activities for
these sites could range from $30 million to $170 million based on undiscounted
1995 costs.

      In 1984, MichCon established an $11.7 million reserve for environmental
investigation and remediation. During 1993, MichCon received MPSC approval of
a cost deferral and rate recovery mechanism for reasonable and prudent
investigation and remediation costs incurred at former MGP sites in excess of
the reserve. During 1995, 1994 and 1993, MCN spent $2.1 million, $0.6 million
and $2.1 million, respectively, investigating and remediating these former MGP
sites. As a result of the studies discussed above, MCN added $35 million to
the reserve and established a corresponding regulatory asset during the fourth
quarter of 1995. At December 31, 1995, the reserve balance was approximately
$38.5 million. Any significant change in assumptions, such as remediation
techniques, nature and extent of contamination and regulatory requirements,
could impact the estimate of remedial action costs for the sites and,
therefore, have an effect on MCN's financial position and cash flows. However,
management believes that insurance coverage and the cost deferral and rate
recovery mechanism approved by the MPSC will prevent environmental costs from
having a material adverse impact on MCN's results of operations.

Franchises

      MichCon operates in numerous cities, villages, and townships under
franchises or permits that typically are revocable at will and have a 30-year
maximum duration. In Grand Rapids and a number of other municipalities where a
significant part of MichCon's service is furnished, MichCon's operations
originated under franchises that have since expired. In 1993, MichCon began
renewing or re-establishing formal franchises in those municipalities in order
to avoid uncertainty with regard to MichCon's ability to continue and expand
service in those areas. Regarding the franchises which have not been renewed,
MichCon's gas distribution systems are rightfully occupying the streets with
the consent or acquiescence of the municipalities. While MichCon could be
ordered by any municipality in which its franchise has expired to remove its
property, it could be deprived of ownership only by its consent and the
payment of an agreed price, or by condemnation and the payment of the fair
value of such property. Should any of these municipalities seek to terminate
MichCon's operations therein and substitute another gas utility operation,
publicly or privately owned, the municipality must either (i) acquire and
operate MichCon's system, (ii) construct a new system or (iii) grant a
franchise to another privately owned utility to construct or acquire its own
distribution system.

      During 1995, MichCon gained 37 franchises with aggregate gas sales
volumes of approximately 0.6 Bcf annually. Approximately 81 major franchises
have been renewed in 1995, including Detroit which accounts for gas sales
volumes of approximately 66.5 Bcf annually.

      Public utility franchises in Michigan are non-exclusive. Construction
under a second franchise granted to another public utility requires
authorization by the MPSC which must consider, among other things, the service
rendered by the existing utility, the investment by such utility, and the
benefit, if any, to the public of having a second utility serve in the area.
In one township where MichCon formerly served approximately 450 residential
customers (representing 78,400 Mcf) under an expired franchise, and upon the
suit of a competing utility with a franchise overlapping the area, a local
circuit judge entered an order to enjoin MichCon from expanding its service in
that township. However, the Michigan Court of Appeals reversed that decision.
This matter is presently pending before the Michigan Supreme Court. On October
1, 1994, MichCon sold its distribution facilities in that township to the
competing utility. Management expects that issues involving franchise rights
will continue to be actively pursued in judicial and regulatory proceedings.

      Citizens operates in cities and townships in and around Adrian, Michigan
under franchises or permits that are revocable, have a 30-year maximum
duration, and provide for municipal rate setting. In November 1995, the
residents of Adrian voted favorably on granting a 30-year renewal franchise to
Citizens. 


                                      9

<PAGE>
                               DIVERSIFIED ENERGY

GAS SERVICES

      In its Gas Services segment, MCN Investment, through its subsidiaries
and joint ventures, engages in gas and oil exploration and production (E&P),
provides gas gathering and processing services, provides gas storage services,
markets natural gas to large-volume customers and develops gas cogeneration
facilities. Gas Services' operating income, including its share of earnings
from joint ventures, was $28.5 million in 1995, an increase of 61% from 1994.
The significant improvement is primarily the result of nearly doubling the
level of gas production over 1994 and a 20% increase in gas sales volume from
Gas Marketing and Cogeneration activities. 

<TABLE> 
<CAPTION>
Diversified Energy -- Gas Markets (Bcf)
------------------------------------------------------------------------------
                                       1995    1994    1993
                                       ----    ----    ----
<S>                                    <C>     <C>     <C>  
 Gas Sales*
   Gas Marketing & Cogeneration ..     170.7   142.3   122.8
   Exploration & Production** ....      16.2     7.5      .1
 Transportation* .................       1.1     1.2      .2
                                       -----   -----   -----
   Total .........................     188.0   151.0   123.1
                                       =====   =====   =====
 Gas Production ..................      31.4    16.5     2.3
                                       =====   =====   =====
<FN>
*  Includes intercompany volumes.
** Represents gas sales made directly to third parties by MCN's E&P
   operations. Other E&P production is sold to affiliated companies for
   marketing.
</TABLE>

Exploration & Production

      MCN Investment is engaged in natural gas exploration, development and
production through its wholly-owned subsidiary, Supply Development Group, Inc.
(SDGI). The primary objective of entering into gas E&P was to develop a
reliable long-term gas reserve pool to supply its gas marketing and
cogeneration operations, as well as other businesses seeking long-term gas
supplies. Long-term sales obligations of these businesses require long-term
gas supplies at known prices. Operating income increased by $7.7 million over
1994 to $18.4 million. This reflects an increase in gas and oil production
during 1995 to 33.7 Bcfe from 17.0 Bcfe in 1994. Approximately 50% of this 
production occurred in the Midwest/Appalachian region and the remainder 
in the Midcontinent/Gulf Coast region. Approximately $11.3 million in tax
credits were generated in 1995 primarily related to gas and oil production
from certain Antrim and coalbed methane gas wells.

      SDGI's strategy is to focus primarily on reserve acquisition and
investing in low-to-medium risk development drilling in known producing areas,
both within and outside Michigan. SDGI invests prudently in gas production
projects with partners/operators, who typically operate the properties while
SDGI manages their performance. This strategy allows SDGI to avoid a
significant up-front, fixed-cost infrastructure.

      In 1995, SDGI drilled approximately 416 wells, bringing the total
drilled to 1,083 wells since the Company program began in 1992. In 1995, about
64% of these wells were drilled in Michigan Devonian (Antrim) shale
formations. Even though the potential natural gas recovery from an average
well is less than the recovery from wells drilled in other types of
formations, wells drilled in the Antrim shale formation have a high success
rate and are therefore considered relatively low risk. SDGI's average working
interest in Antrim shale E&P wells is approximately 75%. The remaining wells
drilled were in the Midcontinent/Gulf Coast region. Exploratory activities in
these areas involve greater risk of dry holes or unproductive wells but there
is also a greater potential for finding larger gas reserves. SDGI's average
working interest in these wells is approximately 40%. SDGI's overall success
rate in the drilling program has averaged approximately 95%. 


                                      10

<PAGE>
      SDGI's success in the Antrim shale formations provided the company with
the confidence to begin a thorough evaluation of similar nonconventional
reservoirs (fractured shales, coal seams and tight sands) throughout the
United States. This effort culminated in late 1995 with the acquisition of a
100% interest in 130 producing wells and rights to undertake additional
development drilling on natural gas properties covering approximately 100,000
acres in the Bluefield, Virginia area. The property contains in excess of 190
Bcf of proved gas reserves. In addition, the purchase included 80 miles of
gathering lines.

      In September 1995, MCN announced the acquisition of a 60% joint venture
interest in a $65 million offshore oil and gas exploration and development
program in the Gulf of Mexico. The joint venture party contributes existing
gas reserves and provides the project with development drilling opportunities.

      In 1995, SDGI made significant investments in natural gas reserves
acquiring interests in over 383 producing wells. At December 1995, SDGI owned
approximately 858 Bcf of proved gas reserves and 4.7 million barrels
(28.1 Bcfe) of proved oil reserves. SDGI holds interests in approximately 
1,346,000 undeveloped acres which could support drilling approximately 
4,875 additional wells, primarily in the Midwest/Appalachian region.

      At December 31, 1995, approximately 1,972 wells were producing. An
additional 362 wells were in various stages of completion and are expected to
begin producing in 1996. Additional information on SDGI's exploration and
production activities is reported under Item 2. Properties, located on pages
16, 17 and 18 under this section.

      In pursuing growth opportunities in the secondary oil production
business, MCN Investment recently acquired an interest in four oil reservoirs
in Michigan, where MCN Investment intends to spur additional oil production
from existing wells by using carbon dioxide, which must be removed from
certain gas produced in Michigan. New facilities for the necessary
compression, dehydration and transportation of the carbon dioxide to the oil
reefs are under construction. Upon completion, MCN Investment will begin
injecting carbon dioxide into the reefs. Oil production is expected to begin
later this year.

      The natural gas industry is very competitive, especially in the area of
obtaining desirable properties and projects for the production of natural gas
and oil. SDGI's approach to E&P is selective, conservative, and diversified.
Focus is primarily in known areas of gas production where the chances of
finding gas are high. SDGI further reduces the risks inherent in E&P drilling
by working with several producers who operate in diverse geographical gas
producing areas. Additional investments in natural gas reserves will be made
in areas that offer proved reserves and an acceptable success percentage.
Competition ranges from the major oil companies to numerous small independent
gas and oil companies.

      It is anticipated that SDGI will invest approximately $450 million in
exploration and production activities in 1996 and between $1.2 billion and
$1.4 billion between 1996 and 2000.

Gas Gathering & Processing

      Operating and joint venture income decreased from $2.0 million in 1994,
to $1.0 million in 1995. The decrease is primarily due to the January 1995
sale of MCN Investment's interest in two gas processing plants.

      MCN Investment, through its subsidiary, Pipeline & Processing Group,
Inc., continued to expand its Gas Gathering & Processing business by acquiring
a one-third interest in a natural gas, oil and condensate gathering system in
the Gulf of Mexico in the third quarter of 1995. The interest was acquired
from Blue Dolphin Energy Company for $10 million. The system includes a 40
mile pipeline, separation facility and a barge loading terminal that is
located in an area that has access to significant natural gas reserves of
approximately 250 Bcf and oil reserves of approximately 15 million barrels (90
Bcfe). In December 1995, MCN Investment also acquired a 50% interest in a 40
mile gathering line connected to coalbed methane reserves in the Appalachian
region. A portion of the gas transported in the Appalachian region is from gas
properties we own in the area.


                                      11

<PAGE>
      In early 1996, MCN Investment acquired a 99% interest in the gas 
gathering properties of Dauphin Island Gathering Partnership in the Mobile
Bay area of offshore Alabama. Included in the acquisition is a 90 mile
offshore gas gathering system that is capable of moving 400 million cubic feet
of gas a day. The total cost of the acquisition is approximately $75 million.

      In January 1996, MCN Investment reached an agreement in principal to
join the Portland Natural Gas Transmission System (PNGTS) as a shipper and
equity partner, with a 20% interest in a proposed 250 mile, $230 million
project. PNGTS is designed to serve the New England market with a capacity 
of 175 MMcf per day. Regulatory filing is expected in March 1996 and
the pipeline is expected to begin operation in late 1998.

      During 1995, MCN Investment constructed two new carbon dioxide
processing plants and acquired an interest in another, all located in
Michigan. With these new additions, MCN Investment now owns or has an interest
in five carbon dioxide processing facilities with a total capacity of 124
MMcf/day. In 1996, MCN Investment expects to complete the construction of two
additional plants, and may expand or acquire additional facilities in Michigan
by year-end.

      MCN's strategy to grow its gas gathering and processing operations is
focused on areas where either reserve development or markets are increasing
and on regions where Gas Services has gas and oil reserves or a gas marketing
focus. It is anticipated that $100 million will be invested in gas gathering
and processing facilities in 1996, and $200 million over the next five years.

Gas Storage

      Joint venture income from two gas storage fields in Michigan for 1995
was $4.2 million, unchanged from 1994.

      MCN Investment, through its subsidiary, Storage Development Company,
(Storage Development) has adopted a strategy of using joint ventures and
strategic partnerships to provide gas storage services, either as a separate
service or bundled with full gas service, to other gas utilities, pipeline
companies and large-volume gas users. Storage facilities near major consuming
markets provide supply flexibility, improve reliability of deliveries and help
reduce gas costs.

      The gas industry's new operating environment has resulted in more
efficient use of existing storage facilities and a reduced immediate need for
additional capacity. However, Gas Services' growing markets will require
expanded storage capabilities in selected areas in the long-term. This future
need, together with Michigan's pivotal geographic location and favorable
geology, presents a significant opportunity for MCN's storage services.

      MCN currently is a 50% partner with ANR Storage Company in the Blue Lake
gas storage field. This 46 Bcf field is located in north central lower
Michigan. MCN's 50% share of the field is equally divided between MichCon and
Storage Development. The field's entire capacity has been sold to ANR Pipeline
under a 20-year contract.

      Storage Development also has a 50% interest in the Washington 28 storage
field, which is located northeast of Detroit in Macomb County. This ten Bcf
field provides storage to MCN's Diversified Energy group's gas marketing
operations.

      MCN is currently evaluating the development of the Washington 10 storage
field in southeastern Michigan. This is a depleted gas reservoir with 42 Bcf
of working gas capacity and excellent deliverability. MCN holds a 50% interest
in the field in partnership with one other company. Development will proceed
once sufficient markets are signed under long-term contract. 


                                      12

<PAGE>
      It is anticipated that up to $150 million may be invested in storage
projects over the next five years.

Gas Marketing & Cogeneration

      Operating income plus joint venture earnings for 1995 increased to $4.9
million from $1.1 million in 1994. This improvement reflects a 20% increase in
sales volumes and improved margins.

      MCN's non-regulated gas marketing activities are directed by CoEnergy
Trading Company (CoEnergy Trading). CoEnergy Trading, a wholly-owned
subsidiary of MCN Investment, is engaged in the purchase and sale of natural
gas to over 700 commercial and industrial users, as well as gas and electric
utilities and other large-volume customers throughout the midwest and
northeast United States and Canada. Through its offices located in Hartford,
Connecticut, Detroit and Grand Rapids, Michigan, CoEnergy Trading is able to
offer buyers in these markets a bundled service by making arrangements for the
acquisition of the required gas volumes and delivery to customers' facilities,
and for all the necessary services in between. This bundled service is more in
demand during the winter months when interstate pipeline capacity in certain
areas of the Northeast and Midwest is either constrained or uneconomical.
CoEnergy Trading is able to better meet this demand through the use of gas
production and access to storage fields and other physical assets owned by
affiliates.

      CoEnergy Trading competes against numerous marketing companies. A
diverse portfolio of short-, medium- and long-term sales and supply contracts
combined with access to reliable gas suppliers, storage facilities and
multiple pipeline connections enhances its competitive position. Further,
CoEnergy Trading uses its competitive position to identify and complement
business opportunities for MCN Investment's various businesses.

      Cogen Development Company (Cogen), a wholly-owned subsidiary of MCN
Investment which was formed in 1993, pursues cogeneration related
opportunities throughout the United States and Canada. Cogeneration is a
process of generating both electricity and steam from a single fuel source,
such as natural gas. Cogeneration projects offer MCN the potential for
multiple sources of income, such as long-term gas sales, transportation
services and a return on the investment in the facility.

      In recent years, an increasing amount of new electric generating
capacity has been fueled by natural gas because of the lower capital costs,
lower emissions and other advantages associated with natural gas-fueled
facilities. In addition, many states have passed regulations requiring
electric utilities to consider bids from third parties to meet new electric
generation needs. Cogen has the capacity to provide cogeneration facilities
with long-term gas supplies at known prices.

      Cogen's strategy is to take a diversified approach of investing in power
projects of varying size and geographic location that offer an acceptable rate
of return. This industry has seen an increase in the number of participants,
many that are willing to accept lower returns on cogeneration projects
considerably below Cogen's threshold. However, the restructuring of the
electric utility industry should increase the long-term opportunities for
Cogen.

      In October 1995, the Michigan Power cogeneration facility, a 123
megawatt cogeneration plant in Ludington, Michigan, began commercial
operations. The $150 million facility provides electricity to Consumers Power
Company and steam to Dow Chemical under long-term contracts. The facility is
owned and operated by an equal partnership between MCN Investment and Destec
Energy. MCN, through its Gas Marketing & Cogeneration business group and Gas
Distribution operations, will supply and transport the nine Bcf of natural gas
needed annually to fuel the plant.

      In March 1995, Cogen signed a 15 year gas sales agreement to provide up
to eight Bcf of natural gas annually to the Panda Brandywine Limited
Partnership, a 230 megawatt cogeneration facility located in Brandywine,
Maryland. The Panda Brandywine project will sell electricity under a long-term
agreement to Potomac Electric Power. Commercial operation is expected to
commence in the fall of 1996.

      Cogen owns a 99% limited partnership interest in Ada Cogeneration
Limited Partnership (Ada Cogeneration), which owns and operates a natural
gas-fueled cogeneration facility in western Michigan. Annually, the Ada
Cogeneration facility generates up to 30 megawatts of electricity which is
sold to 


                                      13

<PAGE>
Consumers Power Company and produces up to 50,000 pounds of steam per
hour which is sold to a nearby commercial operation. MCN supplies and
transports two Bcf of natural gas needed annually to fuel the plant.

      Cogen's business also includes a number of small cogeneration units
located at the operating facilities of large commercial and industrial
customers. Cogen has long-term agreements for the sale and transportation of
natural gas to these units.

      Based on a large demand for electric power, a significant shortfall in
power generating capacity and government incentives to invest in power
generation facilities, Cogen believes substantial opportunities for investment
exist in India. Cogen's strategy for entering India will be the same
diversification strategy employed by Gas Services domestically. Cogen will
partner with local Indian businesses and U.S. companies and will invest in
projects in various geographic locations using a variety of fuels.

      In partnership with other U.S. firms and local Indian businesses, MCN
Investment is actively pursuing six to eight power generation facilities in
various parts of India and will take varying interests in the projects. MCN's
share of construction costs for these facilities is expected to be
approximately $400 million. Some of these plants could go into operation
starting as early as 1997.

      It is anticipated that Cogen will invest approximately $50 million in
power generation projects in 1996 and between $400-$600 million over the next
five years.

Risk Management Strategy

      MCN primarily manages price risk by attempting to maintain a balanced
portfolio of gas supply and gas sales agreements. Net open positions often
result from the timing of new transactions. MCN uses natural gas futures,
options and swap contracts to manage its price risk by offsetting a large
portion of its open positions. MCN has hedged most of its gas and oil
production not covered by long-term fixed-price sales obligations.

COMPUTER OPERATIONS SERVICES

      Operating income for Computer Operations Services increased to $8.0
million in 1995, from $6.6 million in 1994. Services to new and established
customers was the primary contributor to the increase.

      The Genix Group (Genix), a wholly-owned subsidiary of MCN Investment,
provides computer operations management, data processing, network design and
management, large-scale electronic printing and mailing, and business process
solution services to more than a dozen industries in 23 states. Among the
industries served are manufacturing, insurance, financial services, utilities,
transportation, advertising, publishing, software and consumer products.

      Throughout 1995, Genix has gained new customers and increased services
to existing customers. Computer Operations now maintains a well diversified
customer base of approximately 100 customers with annualized revenues that
exceed $100 million. Broken down by service category, 79% of Genix's 1995
revenues were from computer operations management; 12% from network services
and the remaining nine percent from other services. In providing these
services, Genix typically acquires and operates mainframes and other types of
computers that process information for customers. This allows Genix's
customers to focus on their core business rather than investing and operating
in-house data centers.


                                      14

<PAGE>
      Genix competes in the computer services outsourcing industry on price,
high quality, flexible contracts and a wide menu of services. Genix targets
corporate clients that are looking for reliable, quality, value-added computer
services. By outsourcing in-house computer and related operations, a company
can lower its cost of doing business by taking advantage of Genix's economies
of scale, skilled personnel and state-of-the-art equipment. Genix added eight
new computer operations management clients, totaling approximately $16 million
in annualized revenues, in 1995. During 1995 major service contracts were
renewed with eight customers representing approximately $27 million in annual
revenues.

      Genix has entered into long-term contracts to obtain software license
rights for both internal use and for support of client data processing. Under
these agreements, Genix is required to make minimum annual payments through
2004 which total $45,150,000. Additionally, Genix is required to make
contingent payments beginning in 1997 if computer operations revenues exceed
$89,000,000.

      Genix has data centers in North Carolina, Michigan and Pennsylvania. A
London, England operation provides computer operations and desktop services to
European operations of U.S. customers. In 1995, IBM compatible mainframe
processing power has expanded to 1,500 million instructions per second (MIPS),
a 25% increase from 1994. Total processing capacity increased by approximately
40% to 2,700 MIPS.

      As MCN continues to pursue its focused strategy of investments in
energy-related projects, it will periodically evaluate the value and strategic
fit of staying in the computer services business.

OTHER

      MCN Investment is involved in several residential and commercial
community development partnerships.

      Bridgewater Holdings Inc., a 100% owned subsidiary of MCN Investment,
holds a 33-1/3% limited partnership interest in Bridgewater Place Ltd. Limited
Partnership. The partnership owns a 17-story commercial real estate complex
consisting of approximately 375,000 square feet of leasable office space in
Grand Rapids, Michigan.

      Storage Development Company, a 100% owned subsidiary of MCN Investment,
holds a 50% limited partnership interest in The Orchards Golf Limited
Partnership. The Orchards golf course is above the Washington 28 storage
field, which is located north of Detroit. The partnership was formed in 1991
to develop approximately 520 acres of land in Washington Township, Michigan.
This development consists of an 18-hole championship golf course of
approximately 200 acres and a planned residential development for the
remaining 320 acres.


                                      15

<PAGE>
ITEM 2. PROPERTIES

      MCN, through its principal subsidiaries, leases approximately 84,000 sq.
feet of office space in Detroit and Grand Rapids, Michigan and Hartford,
Connecticut under long-term leases.

Gas Distribution

      MichCon operates natural gas distribution, transmission and storage
facilities in the state of Michigan. At December 31, 1995, MichCon's
distribution system included 15,804 miles of distribution mains, 1,051,094
service lines and 1,175,020 active meters. MichCon owns 2,515 miles of
transmission and production lines which deliver natural gas to the
distribution districts and interconnect its storage fields with the sources of
supply and the market areas. MichCon also owns properties relating to five
underground storage fields with an aggregate storage capacity of approximately
130 Bcf. Additionally, MichCon owns district office buildings, service
buildings and gas receiving and metering stations. MichCon occupies its
principal office buildings, located in Detroit and Grand Rapids, Michigan
under long-term leases. Portions of these buildings are subleased to
affiliates and others.

      Most of MichCon's properties are held in fee, by easement, or under
lease agreements expiring at various dates to 2006, with renewal options
extending beyond that date. The principal plants and properties of MichCon are
held subject to the lien of MichCon's Indenture of Mortgage and Deed of Trust
under which MichCon's First Mortgage Bonds are issued. Some existing
properties are being fully utilized and new properties are being added to meet
the requirements of expansion into new areas. MichCon's capital expenditures
for 1995 totaled $235.8 million and could reach $220 million in 1996.

      The Saginaw Bay Pipeline Company owns a 66% interest in the Saginaw Bay
Area Limited Partnership which owns substantially all of the properties used
in the conduct of its business, primarily a 126-mile transmission line. The
Saginaw Bay Lateral Company owns a 46% interest in the Saginaw Bay Lateral
Limited Partnership which owns substantially all of the properties used in the
conduct of its business, primarily lateral lines related to the Saginaw Bay
transmission line.

      Citizens owns all of the properties used in the conduct of its utility
business. Included in these properties is a gas distribution system, a
two-story office building in downtown Adrian and a one-story service center.

Diversified Energy

      The Supply Development Group Inc. has interests in properties used for
gas production, including compressor facilities and small gathering lines. (See
information on the following page on Exploration and Production Activities for
further details).

      Genix owns certain properties, including land and building at their
headquarters located in Dearborn, Michigan. Genix leases facilities and
computer equipment located in Pennsylvania; North Carolina; Southgate,
Michigan and London, England. Certain computer equipment is owned at all
locations.

      MCN is involved in joint ventures that own property associated with gas
storage, cogeneration, gas gathering and processing, and real estate.

      MCN's facilities are suitable and adequate for their intended use.


                                      16

<PAGE>
Exploration and Production Activities

      Supply Development Group, Inc. (SDGI), a subsidiary of MCN, is involved
in various gas and oil producing activities. The following data, together with
the financial information detailed in Note 14 to the Consolidated Financial
Statements, incorporated by reference in Item 8 of this report, and the
general data provided under the "Diversified Energy: Gas Services --
Exploration & Production" section of Item 1 located on page 10, provide
additional information regarding this activity. Information on estimated gas
and oil reserves were obtained by SDGI from the independent petroleum
engineering consultants Ryder Scott Company, Miller and Lents, Ltd., Lee
Keeling & Associates, Inc. and S.A. Holditch & Associates, Inc.

<TABLE>
<CAPTION>
Production

For the Year Ended December 31                                           1995         1994
------------------------------                                           ----         ----

<S>                                           <C>          <C>        <C>          <C>
Average Gas Sales Price (per Mcf)                                     $     2.02   $     1.97

Average Oil Sales Price (per Bbl)                                     $    16.24   $    16.29

Average Production Cost (Mcf)                                         $     0.56   $     0.52

<CAPTION>
                                                 1995        1994        1995         1994
                                                 Gross       Gross        Net          Net
                                                 -----       -----       ----         ----
<S>                                           <C>          <C>        <C>          <C>
Productive Wells and Acreage

Producing Wells
---------------
United States                                     1,972       1,295        1,014          620
                                              =========     =======      =======      =======

Developed Lease Acreage
-----------------------
United States                                   308,878     212,941      149,104      101,301
                                              =========     =======      =======      =======

Undeveloped Lease Acreage
-------------------------
United States                                 1,345,864     610,606      819,049      442,796
Canada                                               --      42,500           --       18,063
                                              ---------     -------      -------      -------
                                              1,345,864     653,106      819,049      460,859
                                              =========     =======      =======      =======

Drilling Activity

Working Interest Well Completions:
  Exploratory
    Productive                                       26          22            6           11
    Dry                                              22          16            7           11
                                              ---------     -------      -------      -------
      Total Exploratory                              48          38           13           22
                                              ---------     -------      -------      -------

  Development
    Productive                                      333         137          228          120
    Dry                                              18           9            9            6
                                              ---------     -------      -------      -------
      Total Development                             351         146          237          126
                                              ---------     -------      -------      -------

Total Working Interest Well Completions             399         184          250          148
                                              =========     =======      =======      =======

Wells in Process of Drilling at December 31         120          92           82           72
</TABLE>


                                      17

<PAGE>
ITEM 3. LEGAL PROCEEDINGS

      In addition to the Gas Distribution's regulatory proceedings and other
matters described in Item 1, "Business," MCN is also involved in a number of
lawsuits and administrative proceedings in the ordinary course of business
with respect to taxes, environmental matters, personal injury, property damage
claims and other matters.

      The management of MCN believes that the resolution of these matters will
not have a material adverse effect on the financial statements of MCN.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      None.


                                      18

<PAGE>
EXECUTIVE OFFICERS OF THE REGISTRANT

      Information with respect to all executive officers of MCN, as of March
1, 1996, is set forth below. Such officers are appointed by the Board of
Directors for terms expiring at the next annual meeting of shareholders
scheduled to be held on April 25, 1996. 

<TABLE>
<CAPTION>
                                       Business Experience During 
Name and Position                 Age  Past Five Years
-----------------                 ---  --------------------------
<S>                               <C>  <C>
Alfred R. Glancy III              58   Present position since September 1992; 
  Chairman, President, Chief           Chairman, Chief Executive Officer and 
   Executive Officer and               Director since August 1988; Chairman 
   Director                            and Director of MCN Investment since 
                                       1988; Chairman and Director of MichCon
                                       since 1984 and 1981, respectively;
                                       Chief Executive Officer of MichCon from
                                       1984 to September 1992.

Rai P. Bhargava                   48   Present position since January 1994; 
  President and Chief                  Executive Vice President and Chief 
  Executive Officer of MCN             Operating Officer of MCN Investment 
  Investment                           from July 1993 to January 1994; Director
                                       of MCN Investment since November 1993;
                                       Vice President, Marketing, of MichCon
                                       from July 1988 to July 1993.

Stephen E. Ewing                  52   Present position since September 1992; 
  President and Chief                  President and Chief Operating Officer
  Executive Officer of                 from August 1988 to September 1992; 
  MichCon and Director                 Director since August 1988; President 
                                       and Director of MichCon since 1985 and
                                       1984, respectively; Chief Operating
                                       Officer of MichCon from 1985 to
                                       September 1992.

William K. McCrackin              62   Present position since September 1992; 
  Vice Chairman, Chief Financial       Vice Chairman, Chief Financial Officer,
   Officer and Director                Treasurer and Director from August 
                                       1988 to September 1992; Director of MCN
                                       Investment since 1988; Vice Chairman of
                                       MichCon from March 1986 to September
                                       1992; Chief Financial Officer of
                                       MichCon from 1985 to September 1992;
                                       Director of MichCon since 1984.

Daniel L. Schiffer                52   Present position since September 1995; 
  Senior Vice President,               Vice President, General Counsel and 
  General Counsel and Secretary        Secretary of MCN sinceApril 1989; 
                                       General Counsel and Secretary of MCN
                                       since August 1988; Vice President and
                                       General Counsel of MichCon from July
                                       1991 to September 1992; Associate
                                       General Counsel of MichCon from 1984 to
                                       July 1991; Secretary of MichCon from
                                       June 1988 to April 1990 and a Director
                                       of MichCon since January 1989.
</TABLE>


                                      19

<PAGE>
                                    PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

      MCN Common Stock is traded on the New York Stock Exchange. On February
26, 1996 there were 24,051 holders of record of MCN Common Stock. Information
regarding the market price of MCN Common Stock and related security holder
matters is incorporated by reference herein from the section entitled
"Supplementary Financial Information" in MCN's 1995 Annual Report to
Shareholders, pages 64 and 65.

ITEM 6. SELECTED FINANCIAL DATA

      Information required pursuant to this item is incorporated by reference
herein from the section entitled "Supplementary Financial Information" in
MCN's 1995 Annual Report to Shareholders, pages 64 and 65.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

      Information required pursuant to this item is incorporated by reference
herein from the section entitled "Management's Discussion and Analysis" in
MCN's 1995 Annual Report to Shareholders, pages 34 through 42.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      Information required pursuant to this item is incorporated by reference
herein from the following sections of MCN's 1995 Annual Report to
Shareholders. The consolidated statement of income, cash flows and
capitalization are for each of the years ended December 31, 1995, 1994 and
1993 and the consolidated statement of financial position is as of December
31, 1995 and 1994.

      Consolidated Statement of Financial Position, page 43

      Consolidated Statement of Income, page 44

      Consolidated Statement of Cash Flows, page 45

      Consolidated Statement of Capitalization, page 46

      Notes to Consolidated Financial Statements, pages 47 through 63

      Supplementary Financial Information, page 64 and 65; and

      Independent Auditors' Report, page 66

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

      None.


                                      20

<PAGE>
                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      The information set forth in the section entitled "Proposal 1 --
Election of Directors" in MCN's February 1996 definitive Proxy Statement is
incorporated by reference herein.

      Information concerning the executive officers of MCN is set forth in the
section entitled "Executive Officers of the Registrant" on page 19 in Part I
of this Report.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED

      The information set forth in the section entitled "Filings Under Section
16 (a)" in MCN's February 1996 definitive Proxy Statement is incorporated by
reference herein.

ITEM 11. EXECUTIVE COMPENSATION

      The information set forth in the sections entitled "Compensation of
Directors and Executive Officers" and "Report of the Compensation Committee of
the Board of Directors on Executive Compensation", in MCN's February 1996
definitive Proxy Statement is incorporated by reference herein.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The information set forth in the section entitled "Beneficial Security
Ownership of Directors, Nominees and Executive Officers", in MCN's February
1996 definitive Proxy Statement is incorporated by reference herein.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      The information set forth in the sections entitled "Executive
Compensation" and "Other Compensation Matters", in MCN's February 1996
definitive Proxy Statement is incorporated by reference herein.

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON FORM 8-K

(A) LIST OF DOCUMENTS FILED AS PART OF THE REPORT:

            1. For a list of financial statements incorporated by reference,
               see the section entitled "Financial Statements and
               Supplementary Data", on page 20 in Part II, Item 8 of this
               Report.

            2. The Financial Statement Schedule for each of the three years in
               the period ended December 31, 1995, unless otherwise noted, are
               included herein in response to Part II, Item 8:

                  Independent Auditors' Report

               Schedule

                  II -- Valuation and Qualifying Accounts

      Schedules other than that referred to above are omitted as not applicable
or not required, or the required information is shown in the financial
statements or notes thereto.


                                      21

<PAGE>
                          INDEPENDENT AUDITORS' REPORT

MCN Corporation:

      We have audited the consolidated financial statements of MCN Corporation
and subsidiaries as of December 31, 1995 and 1994 and for each of the three
years in the period ended December 31, 1995, and have issued our report
thereon dated February 8, 1996; such consolidated financial statements and
report are included in your 1995 Annual Report to Shareholders and are
incorporated herein by reference. Our audits also included the consolidated
financial statement schedule of MCN Corporation and subsidiaries, listed in
Item 14. This financial statement schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion based on our
audits. In our opinion, such financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.


DELOITTE & TOUCHE LLP
Detroit, Michigan
February 8, 1996


                                      22

<PAGE>
                                                                   SCHEDULE II

                        MCN CORPORATION AND SUBSIDIARIES
                SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
                             (Thousands of Dollars)

<TABLE>
<CAPTION>
                                                                            Column C      
                      Column A                          Column B           Additions           Column D      Column E
                                                                     ---------------------    Deductions
                                                                     Provisions charged to   for Purposes
                                                       Balance at    ---------------------   for Which the   Balance
                                                       Beginning                Regulatory   Reserves Were   at End
                     Description                       of Period      Income       Asset        Provided    of Period
----------------------------------------------------   ----------    ----------  ---------   -------------  ---------
                                                                           Year Ended December 31, 1995
                                                                           ----------------------------
<S>                                                    <C>          <C>            <C>          <C>          <C>    
Reserve deducted from assets in
 Consolidated Statement of Financial Position:
  Allowance for doubtful accounts .................    $16,101      $ 15,274       $   --       $17,610      $13,765
  Allowance for sale of partnership interest (1) ..         91          --             --            91         --
  Allowance for notes receivable (2) ..............      1,954        (1,607)          --           347         --
                                                       -------      --------       -------      -------      -------
                                                       $18,146      $ 13,667       $   --       $18,048      $13,765
                                                       =======      ========       =======      =======      =======

Reserves included in Current Liabilities --
 Other and in Accrued Environmental Costs 
 in Consolidated Statement of  Financial 
 Position:
  Environmental testing (3) .......................    $ 5,540      $   --         $35,000      $ 2,089      $38,451
                                                       =======      ========       =======      =======      =======

Reserves included in Deferred Credits and Other
 Liabilities -- Other in Consolidated Statement of
 Financial Position:
  Injuries and damages ............................    $ 8,402      $  1,026       $   686      $ 2,101      $ 8,013
                                                       =======      ========       =======      =======      =======

<CAPTION>
                                                                           Year Ended December 31, 1994
                                                                           ----------------------------
<S>                                                    <C>          <C>            <C>          <C>          <C>    
Reserve deducted from assets in Consolidated
 Statement of Financial Position:
  Allowance for doubtful accounts .................    $19,576      $ 20,392       $   --       $23,867      $16,101
  Allowance for sale of partnership interest (1) ..       --              91           --          --             91
  Allowance for notes receivable ..................        579         1,375           --          --          1,954
                                                       -------      --------       -------      -------      -------
                                                       $20,155      $ 21,858       $   --       $23,867      $18,146
                                                       =======      ========       =======      =======      =======

Reserves included in Current Liabilities --
 Other in Consolidated Statement of
 Financial Position:
  Environmental testing (3) .......................    $ 6,179      $   --         $   --       $   639      $ 5,540
                                                       =======      ========       =======      =======      =======

Reserves included in Deferred Credits and Other
 Liabilities -- Other in Consolidated Statement of
 Financial Position:
  Injuries and damages ............................    $ 9,090      $  1,656       $   387      $ 2,731      $ 8,402
                                                       =======      ========       =======      =======      =======

<CAPTION>
                                                                           Year Ended December 31, 1993
                                                                           ----------------------------
<S>                                                    <C>          <C>            <C>          <C>          <C>    
Reserve deducted from assets in Consolidated
 Statement of Financial Position:
  Allowance for doubtful accounts .................    $24,930      $ 21,138       $   --       $26,492      $19,576
  Allowance for notes receivable ..................       --             579           --          --            579
                                                       -------      --------       -------      -------      -------
                                                       $24,930      $ 21,717       $   --       $26,492      $20,155
                                                       =======      ========       =======      =======      =======

Reserves included in Current Liabilities --
 Other in Consolidated Statement of
  Financial Position:
  Environmental testing (3) .......................    $ 1,677      $   --             --       $(4,502)     $ 6,179
                                                       =======      ========       =======      =======      =======

Reserves included in Deferred Credits and Other
 Liabilities -- Other in Consolidated Statement of
 Financial Position:
  Injuries and damages ............................    $10,105      $  1,895       $   372      $ 3,282      $ 9,090
  Environmental testing (3) .......................      6,575          --             --         6,575         --
                                                       -------      --------       -------      -------      -------
                                                       $16,680      $  1,895       $   372      $ 9,857      $ 9,090
                                                       =======      ========       =======      =======      =======
<FN>
---------
NOTES:

(1) During 1994, MCN established a reserve for the expected loss relating to
    the sale of a partnership interest in a gas marketing joint venture. The
    sale took place in 1995.

(2) During 1995, MCN reversed $1,600,000 of an uncollectible reserve on an
    advance made to a joint venture. The uncollectible provision was reversed
    upon the receipt of payments and credit support to ensure repayment of the
    remaining advance balance.

(3) Reference is made to Note 7b to the Consolidated Financial Statements in
    the 1995 Annual Report to Shareholders of MCN Corporation, page 51. During
    the year ended December 31, 1993, $6,575,000 was transferred from Deferred
    Credits and Other Liabilities -- Other to Current Liabilities -- Other.
    Actual expenditures deducted against the reserve in 1993 was $2,073,000.
</TABLE>

                                      23

<PAGE>

3. Exhibits, Including Those Incorporated by Reference.
<TABLE>
<CAPTION>
Exhibit No.     Description
-----------     -----------
<S>    <C>
 3-1   Articles of Incorporation of MCN Corporation (Exhibit 3-1 to March 31,
       1993 Form 10-Q).

 3-2   By-Laws of MCN Corporation, as amended (Exhibit 3-2 to March 31, 1993
       Form 10-Q).

 4-1   Rights Plan (Exhibit 28-1 to Form 8-K dated December 20, 1989).

 4-2   Subordinated Debt Securities Indenture between MCN
       Corp. and NBD Bank, N.A., as Trustee (Exhibit 4-5 to
       Registration Statement No. 33-55665).

 4-3   Debt Securities Indenture between MCN Investment
       Corp. and NBD Bank as Trustee (Exhibit 4-1 to
       Registration Statement No. 33-63311).

10-1   MCN Stock Option Plan Post-Effective Amendment No. 1
       (Registration Statement No. 33-21930-99).

10-2   Directors' Deferred Fee Plan (Exhibit 10-3 to 1989
       Form 10-K).

10-3   Executive Deferred Compensation Plan (Exhibit 10-4 to
       1989 Form 10-K).

10-4   MCN Corporation Stock Incentive Plan (Exhibit 10-5 to 1989 Form 10-K).

10-5   Form of Employment Agreement (Exhibit 10-1 to March 31, 1990 Form
       10-Q).

10-6   MCN Corporation Annual Performance Plan (Exhibit 10-6 to 1993 Form
       10-K).

10-7   MCN Corporation Non-Officer Director Stock Award Plan
       (Exhibit 10-1 to March 31, 1994 Form 10-Q).

10-8   MCN Corporation Mandatory Deferred Compensation Plan
       (Exhibit 10-8 to 1995 Form 10-K).

12-1   Computation of Ratio of Earnings to Fixed Charges for
       MCN Corporation.*

12-2   Computation of Ratio of Earnings to Fixed Charges for
       MCN Investment Corporation.*

13-1   MCN Corporation 1995 Annual Report to Shareholders.* 

21-1   List of MCN Subsidiaries.* 

23-1   Independent Auditors' Consent -- Deloitte & Touche LLP.*

23-2   Consent of Ryder Scott Company.*

23-3   Consent of Miller and Lents, Ltd.*

23-4   Consent of Lee Keeling & Associates, Inc.*

23-5   Consent of S.A. Holditch & Associates, Inc.*

24-1   Powers of Attorney.*

27-1   Financial Data Schedule.*
<FN>
----------------
*Indicates document filed herewith.

</TABLE>

References are to MCN (File No. 1-10070) for documents incorporated by
reference.


                                      24

<PAGE>
(B) REPORTS ON FORM 8-K:

      MCN filed a report on Form 8-K dated November 17, 1995, under Item 5
with respect to the offering by MCN Investment Corporation of its Medium-Term
Notes, Series A, pursuant to the joint registration statement of MCN and MCN
Investment Corporation on Form S-3, as amended, (No. 33-63311), as described
in the Prospectus Supplement dated November 17, 1995 to the Prospectus dated
November 6, 1995. A Form of Purchase Agreement was filed as an Exhibit
thereto.


                                      25

<PAGE>
                                   SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Annual Report to be
signed on its behalf by the undersigned, thereunto duly authorized.

                                                     MCN CORPORATION
                                             -------------------------------
                                                       (Registrant)

                                              By: /s/ Patrick Zurlinden
                                                 ---------------------------
                                                      Patrick Zurlinden
                                                 Vice President, Controller
                                                and Chief Accounting Officer

      Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the
registrant and in the capacities and on the dates indicated. 
<TABLE> 
<CAPTION>
                                            Title                      Date
                                            -----                      ----

<S>                             <C>                                 <C>
            *                   Director, Chairman, President       March 1, 1996
---------------------------     and Chief Executive Officer
   Alfred R. Glancy III         

            *                   Director, Vice Chairman and         March 1, 1996
---------------------------     Chief Financial Officer
   William K. McCrackin         

      Patrick Zurlinden         Vice President, Controller and      March 1, 1996
---------------------------     Chief Accounting Officer
      Patrick Zurlinden         

            *                   Director                            March 1, 1996
---------------------------     
     Stephen E. Ewing

            *                   Director                            March 1, 1996
---------------------------     
      Roger Fridholm

            *                   Director                            March 1, 1996
---------------------------     
    Frank M. Hennessey

            *                   Director                            March 1, 1996
---------------------------     
    Thomas H. Jeffs II

            *                   Director                            March 1, 1996
---------------------------     
    Arthur L. Johnson

            *                   Director                            March 1, 1996
---------------------------     
     Dale A. Johnson

            *                   Director                            March 1, 1996
---------------------------
   Helen O. Petrauskas

            *                   Director                            March 1, 1996
---------------------------
      Howard F. Sims

*By: /s/ Patrick Zurlinden
     ---------------------
       Patrick Zurlinden
       Attorney-in-Fact
</TABLE>

                                      26