PG Energy Files Requests to Lower Gas Costs 2006

Wilkes-Barre, PA (June 1, 2006) – PG Energy today announced that it has filed a request with the Pennsylvania Public Utility Commission to decrease its gas cost rates by 7.4 percent to $1.01 per ccf (hundred cubic feet) from $1.09, effective June 1. The filing marks the third time this year PG Energy has requested a reduction in its gas cost.

Separate from the June 1 adjustment, PG Energy has also completed its annual cost of gas filing to be effective December 1 through November 30, 2007. The cost is proposed at $1.02 per ccf, a 15.6 percent decrease from its December 1, 2005 cost of $1.21 per ccf.

PG Energy sets its annual cost of gas on December 1 of each year based on projected natural gas costs for December 1 through November 30 of the following year. That cost is then subject to quarterly adjustments, upward or downward, that reflect actual commodity costs incurred by the company.

For the average residential customer using 104 ccf a month, the projected cost represents a $19.54 or a 12.2 percent decrease in retail rates. Actual bills will vary based on individual usage and weather. PG Energy explains that a relatively mild winter led to a reduction in natural gas prices at the wholesale commodities market, where the company purchases natural gas for its 158,000 customers.
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“As the mild winter eased demand for natural gas, inventory levels this spring have increased substantially, allowing prices to decline,” says Bruce Davis, vice president of gas supply and marketing. “At a time when other energy fuels, such as gasoline and oil continue to peak at high levels, we are pleased to be able to pass along any savings in energy costs that we can to our customers.”

PG Energy purchases natural gas from producers at wholesale market prices and passes those prices directly on to customers with no markup. PG Energy last lowered its natural gas cost 7.8 percent on February 9 and 2.2 percent on March 1. The gas cost for the average residential heating customer represents approximately 70-80 percent of a customer’s overall natural gas bill.

For customers experiencing or anticipating difficulty in managing their natural gas bills, PG Energy offers a number of assistance programs. Last heating season, 16,457 PG Energy customers received roughly $3.2 million in LIHEAP (Low-Income Home Energy Assistance Program) assistance. Information on LIHEAP and other programs is available by calling 1-888-829-8611. The company also offers a budget payment plan that begins each September for residential natural gas heating customers.

PG Energy, headquartered in Wilkes-Barre, Pennsylvania, is a natural gas operating division of Southern Union Company (NYSE:SUG). PG Energy serves approximately 158,000 customers in 13 counties throughout northeastern and central Pennsylvania.