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UGI to Increase Natural Gas Rates in June; Company Projects Additional Increase in December

16 May 2005

Reading, PA (May 16, 2005) – UGI Utilities, Inc. – Gas Division announced that its purchased gas cost (PGC) rates will increase on June 1, 2005 due to higher wholesale gas prices.  As a result, the average residential heating customer’s bill will increase by 4.1% or $4.69 per month.

On June 1, UGI will also submit its annual filing with the Pennsylvania Public Utility Commission (PUC) to establish PGC rates for December 1, 2005.  The projected December rates would increase bills an additional 3.1% or $3.61 per month above the rates implemented in June.

According to Vicki O. Ebner, UGI’s Vice President of Marketing & Gas Supply, “Our nation’s use of clean burning natural gas continues to increase faster than new supplies have become available.  This tight balance between supply and demand has led to higher prices.”  UGI and other gas utilities support the passage of a balanced national energy policy.  “In order to lower natural gas prices the U.S. needs a comprehensive plan that increases domestic and imported supplies while also encouraging greater energy efficiency and a more diverse mix of fuels to generate electricity,” Ebner said.

Utilities do not profit from higher gas cost rates.  They are required to pass the cost of the natural gas they purchase directly through to customers without any markup.  Ebner stressed, “While no one likes higher energy prices, natural gas remains a good value, compared to other fuels.  Customers can be confident that UGI is making every effort to manage gas costs by using strategies such as placing gas into storage in the summer and using financial tools to control and stabilize our 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 increase from $113.60 per month to $118.29 on June 1 and then to $121.90 on December 1.  The bill for a typical commercial retail customer using 393 ccf per month will increase from $522.60 per month to $544.32 on June 1 and then to $561.06 on December 1.  The bill for a typical industrial retail customer using 1,006 ccf per month will increase from $1,311.73 per month to $1,367.28 on June 1 and then to $1,410.10 on December 1.

Customers may call UGI toll-free at 1-800-276-2722 to receive further information on the proposed rates or to find out what actions they may take.

UGI’s Gas Division is headquartered in Reading, PA and serves 300,000 customers in 14 southeastern Pennsylvania counties.  Additional information about UGI Gas Division is available on the World Wide Web at www.ugi.com.