Contact:         Donna M. Gillis                    

                        570/829-8847

UGI PENN NATURAL GAS REDUCES GAS COST FOURTH TIME THIS YEAR

Utility lowers cost amid seasonable weather and high inventories

WILKES-BARRE (September 1, 2006) – UGI Penn Natural Gas, formerly PG Energy, announced today that the company has decreased its gas cost by $.363 per mcf (thousand cubic feet) or 3.59 percent effective September 1, 2006.  The quarterly reduction brings the price of natural gas to $9.76 per mcf from $10.13 per mcf.

This is the fourth time the company has lowered its gas cost this year, following a 7.8 percent reduction in February, a 2.2 percent reduction in March and a 7.4 percent reduction in June, leading to a 19.5 percent or $2.36 overall decrease in gas cost this year.   For the average residential customer using 120 mcf per year, the monthly bill will decrease from $136.05 to $132.42.  Actual UGI-PNG bills, however, will vary based on individual usage. 

The average commercial customer’s bill with average usage of 413 mcf per year will decrease from $428.27 to $415.74 per month.  The average industrial customer’s bill with average usage of 19,620 mcf per year will decrease from $19,040.06 to $18,446.72 per month.

“Due to seasonable summer weather and higher than expected inventories of  natural gas, we have been able to reduce our gas cost for the fourth time this year,” says Bruce Davis, vice president of gas supply and marketing.  “While the future cost of gas is contingent on a number of factors, including the upcoming winter weather, UGI-PNG is pleased to pass along additional savings to our customers.”

UGI-PNG sets the annual cost of gas on December 1 of each year; that cost is then subject to quarterly adjustments, upward or downward, which reflect actual commodity costs incurred by the company.  

Natural gas service consists of two main components: gas cost and base rate.

UGI-PNG purchases natural gas at wholesale market prices and resells it to customers without markup or profit.  The gas cost for the average residential heating customer represents approximately 77 percent of a customer’s overall natural gas bill.  The base rate is designed to cover items such as the cost to safely and reliably deliver natural gas to customers, maintenance and improvements of the natural gas distribution system and administrative costs. 

While UGI-PNG has been able to lower its gas cost, the company cautions customers that weather and market conditions may once again force a spike in natural gas costs.  Those customers experiencing or anticipating difficulty in managing natural gas bills are advised to seek payment assistance by calling UGI-PNG at 1-888-829-8611.  The company offers a number of payment assistance programs, including its Budget Payment Plan which gives customers  a more predictable and balanced payment arrangement.   

UGI Penn Natural Gas, Inc., headquartered in Wilkes-Barre, Pennsylvania, is a wholly owned subsidiary of UGI Utilities, Inc.  UGI Penn Natural Gas serves approximately 158,000 customers in 13 counties throughout northeastern and central Pennsylvania.    For more information, visit www.ugipng.com.

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