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UGI to Decrease Natural Gas Rates 2% in June; Company Projects Additional 6.4% Rate Decrease in December

16 May 2006

Reading, PA (May 16, 2006) – UGI Utilities, Inc. – Gas Division announced that its purchased gas cost rates will decrease on June 1, 2006 due to lower wholesale gas prices.  As a result, the average residential heating customer’s bill will decrease by approximately 2%.

On June 1, UGI will also submit its annual filing with the Pennsylvania Public Utility Commission (PUC) to establish purchased gas cost rates for December 1, 2006.  The projected December rates would decrease bills an additional 6.4% from the rates implemented in June.

According to Vicki O. Ebner, UGI’s Vice President of Marketing & Gas Supply, “We are pleased to be able to pass along another rate decrease to our customers.”  The 2% rate decrease on June 1 will be UGI’s third purchased gas cost decrease in 2006 and follows a 3% decrease on February 10 and a 2% decrease on April 7.  “Provided future wholesale prices for natural gas remain consistent with our current projections, we will be able to decrease rates again effective December 1st.” Ebner said.

By law, utilities can not earn a profit on the natural gas commodity portion of a customer’s bill.  They are required to pass the cost of the natural gas they purchase directly through to customers without any markup.  Utilities such as UGI are required to file their gas cost rates annually for review with the PUC and may adjust these rates quarterly or on an interim basis to reflect changes in wholesale natural gas prices.

If UGI’s proposed rates are approved, the bill for a typical residential retail heating customer who uses about 85 ccf (hundred cubic feet) of natural gas per month will decrease from $144.17 per month to $141.46 on June 1 and then to $132.47 on December 1.  The bill for a typical commercial retail customer using 393 ccf per month will decrease from $658.02 per month to $645.45 on June 1 and then to $603.80 on December 1.  The bill for a typical industrial retail customer using 1,006 ccf per month will decrease from $1658.02 per month to $1625.87 on June 1 and then to $1519.38 on December 1.

Customers may call UGI at 1-800-276-2722 to receive further information on the proposed rates or to find out what actions they may take.   UGI encourages customers to continue to use energy wisely.  All customers are encouraged to sign up for UGI’s free budget billing program, which spreads bills out over a 12-month period.  Customers with a limited or fixed income should call UGI at 1-800-UGI-WARM to determine if they are eligible for one of several energy assistance programs.  Finally, any customer who is behind on their gas bills should contact UGI as soon as possible to discuss a payment arrangement with the utility.

UGI’s Gas Division is headquartered in Reading, PA and serves 307,000 customers in 14 southeastern Pennsylvania counties.  Additional information about UGI Gas Division is available on the World Wide Web at www.ugi.com.