<PAGE>
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-5540
PEOPLES ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
ILLINOIS 36-2642766
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
24TH FLOOR, 130 EAST RANDOLPH DRIVE, CHICAGO, ILLINOIS 60601-6207
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 240-4000
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
Name on each exchange
Title of Each Class on which registered
------------------------------- -----------------------
Common Stock, without par value New York Stock Exchange
Chicago Stock Exchange
Pacific Stock Exchange
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 (#229.405 of this chapter) 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 amendment to this Form 10-K. [ X ]
State the aggregate market value of the voting stock held by non-affiliates of
the registrant:
Approximately $1.07 billion computed on the basis of the
closing market price of $30 1/2 for a share of Common Stock
on November 30, 1995.
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Common Stock, without par value, 34,936,911 shares outstanding
at November 30, 1995.
DOCUMENTS INCORPORATED BY REFERENCE
DOCUMENT PART OF FORM 10-K
-------- -----------------
Portions of the Company's Notice of Annual Meeting and
Proxy Statement to be filed on or about December 28, 1995 Part III
<PAGE>
CONTENTS
PAGE
ITEM NO. NO.
- -------- -----
PART I
------
1. Business 3
2. Properties 8
3. Legal Proceedings 9
4. Submission of Matters to a Vote of Security Holders 9
Executive Officers of the Company 10
PART II
-------
5. Market for the Company's Common Stock and Related
Stockholder Matters 12
6. Selected Financial Data 13
7. Management's Discussion and Analysis of Results
of Operations and Financial Condition 14
8. Financial Statements and Supplementary Data 21
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 47
PART III
--------
10. Directors and Executive Officers of the Company 47
11. Executive Compensation 47
12. Security Ownership of Certain Beneficial Owners and
Management 47
13. Certain Relationships and Related Transactions 47
PART IV
-------
14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K 48
Signatures 50
Exhibit Index 51
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<PAGE>
PEOPLES ENERGY CORPORATION
ANNUAL REPORT ON FORM 10-K
FISCAL YEAR ENDED SEPTEMBER 30, 1995
PART I
ITEM 1. BUSINESS
GENERAL
Peoples Energy Corporation (Company) is solely a holding company and does
not engage directly in any business of its own. Income is derived principally
from the Company's utility subsidiaries, The Peoples Gas Light and Coke Company
(Peoples Gas) and North Shore Gas Company (North Shore Gas).
The Company was incorporated in 1967 under the Illinois Business
Corporation Act and has its principal executive offices at 130 East Randolph
Drive, Chicago, Illinois 60601-6207 (Telephone 312-240-4000). The Company has
no employees of its own.
Peoples Gas, an operating public utility, is engaged primarily in the
purchase, storage, distribution, sale, and transportation of natural gas. It
has approximately 840,000 residential, commercial, and industrial retail sales
and transportation customers within the City of Chicago (City). Peoples Gas had
2,989 employees at September 30, 1995.
North Shore Gas, an operating public utility, is engaged primarily in the
purchase, storage, distribution, sale, and transportation of natural gas. It
has about 133,000 residential, commercial, and industrial retail sales and
transportation customers within its service area of approximately 275 square
miles, located in Northeastern Illinois. North Shore Gas had 244 employees at
September 30, 1995.
Peoples District Energy Corporation (Peoples District Energy), a wholly
owned subsidiary of the Company, is a 50 per cent participant in a partnership
that provides district energy services to the McCormick Place exposition and
convention center in Chicago, Illinois. Neither the partnership nor its
partners are regulated as a public utility. (See Note 6 of the Notes to
Consolidated Financial Statements.)
Two other wholly owned subsidiaries of the Company are Peoples Energy
Services Corporation (Peoples Energy Services) and Peoples NGV Corp. Peoples
Energy Services offers natural gas and energy management related services.
Peoples NGV Corp. is a participant in a partnership that was formed to develop
on-site fueling services for natural gas-powered fleet vehicles. Neither the
partnership nor its partners are regulated as a public utility.
COMPETITION
Peoples Gas and North Shore Gas are authorized by statute and/or
certificates of public convenience and necessity to conduct operations in the
territories they serve. In addition, these subsidiaries operate under
franchises and license agreements granted them by the communities they serve.
Peoples Gas holds a perpetual, non-exclusive franchise from the City. North
Shore Gas' franchises with communities within its service territory are of
various terms and expiration dates.
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<PAGE>
Absent extraordinary circumstances, potential competitors are barred from
constructing competing gas distribution systems in the utility subsidiaries'
service territories by a judicial doctrine known as the "first in the field"
doctrine. In addition, the high cost of installing duplicate distribution
facilities would render the construction of a competing system impractical.
Competition in varying degrees exists between natural gas and other fuels
or forms of energy available to consumers in Peoples Gas' and North Shore Gas'
service areas. The capital cost of heating and cooling facilities in new high-
rise buildings is higher for gas than for electricity. This circumstance,
combined with stagnant high-rise construction activity, has adversely affected
the ability of Peoples Gas to attach commercial high-rise buildings.
State and federal regulators are currently evaluating ways in which the
generation and distribution of electricity may be deregulated so that end users
may purchase electricity from producers other than their local electric utility
and require such local utility to transport the electricity so purchased, a
concept commonly referred to as "retail wheeling." In the event retail wheeling
were permitted in the service territories of Peoples Gas and North Shore Gas,
the cost of electricity would be expected to decline, thereby reducing the
advantage of lower operating costs that natural gas currently enjoys over
electricity.
A substantial portion of the gas that Peoples Gas and North Shore Gas
deliver to their customers consists of gas that the subsidiaries' customers
purchase directly from producers and marketers rather than from the
subsidiaries. The direct customer purchases have no effect on net income
because the utilities provide transportation service for such gas volumes and
recover margins similar to those applicable to conventional gas sales.
A pipeline may seek to provide transportation service directly to end-
users. Such direct service by a pipeline to an end-user would bypass the local
distributor's service and reduce the distributor's earnings. However, none of
the subsidiaries' pipeline suppliers has undertaken any service bypassing the
subsidiaries. Both utility subsidiaries have a bypass rate approved by the
Illinois Commerce Commission (Commission) which allows the utilities to
renegotiate rates with customers that are potential bypass candidates.
Peoples District Energy competes in the heating and cooling market through
a partnership that offers unregulated district energy services for large
buildings. (See Note 6 of the Notes to Consolidated Financial Statements.)
Peoples Energy Services competes in the offering of energy management
related services. Peoples NGV Corp. competes, through a partnership, in the
development of unregulated on-site fueling services for natural gas-powered
fleet vehicles.
SALES AND RATES
Peoples Gas and North Shore Gas sell natural gas having an average heating
value of approximately 1,000 British thermal units (Btu's) per cubic foot.*
Sales are made and service rendered by Peoples Gas and North Shore Gas pursuant
to rate schedules on file with the Commission containing various service
classifications largely reflecting customers' different uses and levels of
consumption. The Gas Charge is determined in accordance with the provisions in
Rider 2, Gas Charge and Refund Adjustments, to recover
- --------------------------------------------------------------------------------
* All volumes of natural gas set forth in this report are stated on a 1,000 Btu
(per cubic foot) billing basis.
(100 cubic feet = 1 therm; 10 therms = 1 Dekatherm)
- 4 -
<PAGE>
the costs incurred by Peoples Gas and North Shore Gas to purchase, transport,
manufacture, and store gas supplies. The level of the Gas Charge under both
subsidiaries' rate schedules is adjusted monthly to reflect increases or
decreases in natural gas supplier charges, purchased storage service costs,
transportation charges, and liquefied petroleum gas costs. In addition, under
the tariffs of Peoples Gas and North Shore Gas, the difference for any fiscal
year between costs recoverable through the Gas Charge and the revenues billed to
customers under the Gas Charge is refunded or recovered over a 12-month billing
cycle beginning the following January 1. Consistent with these tariff
provisions, such difference for any month is recorded either as a current
liability or a current asset (with a contra entry to Gas Costs), and the fiscal
year-end balance is amortized over the 12-month period beginning the following
January 1. Peoples Gas and North Shore Gas have been recovering, through their
rates, pipeline charges billed for transition costs resulting from the
implementation of Federal Energy Regulatory Commission (FERC) Order No. 636.
(See Notes 1J, 2A, and 2B of the Notes to Consolidated Financial Statements.)
The business of the Company's utility subsidiaries is influenced by
seasonal weather conditions because a large element of the subsidiaries'
customer load consists of space heating. Weather-related deliveries can,
therefore, have a significant positive or negative impact on net income. (For
discussion of the effect of the seasonal nature of gas sales on cash flow, see
Liquidity in Item 7.)
The basic marketing plans of Peoples Gas and North Shore Gas are to
maintain their existing shares in all market segments and develop opportunities
emerging from changes in the utility environment and technological equipment
advances for new, expanded, or current natural gas applications, including
cogeneration, prime movers, natural gas-fueled vehicles, and natural gas space
conditioning.
STATE LEGISLATION AND REGULATION
Peoples Gas and North Shore Gas are subject to the jurisdiction of and
regulation by the Commission, which has general supervisory and regulatory
powers over practically all phases of the public utility business in Illinois,
including rates and charges, issuance of securities, services and facilities,
systems of accounts, investments, safety standards, transactions with affiliated
interests, as defined in the Illinois Public Utilities Act, and other matters.
In 1992, the Commission issued an order in its consolidated proceedings,
initiated in 1991, regarding the appropriate ratemaking treatment of
environmental costs relating to past manufactured gas operations incurred by
Illinois utilities, including Peoples Gas and North Shore Gas. In its order,
the Commission approved rate recovery of such environmental costs but required
that the recovery occur over a five-year period without recovery of carrying
charges on unrecovered balances. The part of the Commission's order that
disallowed recovery of carrying charges on unrecovered balances has been
reversed on appeal by the Illinois Supreme Court, which has remanded the case to
the Commission. (See Note 2A of the Notes to Consolidated Financial Statements.
Also see Note 18 "Events (Unaudited) Subsequent to the Auditors' Report Dated
November 1, 1995.")
On September 15, 1993, the Commission entered an order initiating an
investigation into the appropriate means of recovery by Illinois gas utilities
of pipeline charges for FERC Order 636 transition costs. The Illinois Appellate
Court affirmed the Commission's order on rehearing on September 21, 1995. (See
Notes 1J, 2A, and 2B of the Notes to Consolidated Financial Statements.)
Peoples Gas and North Shore Gas filed proposed changes in rates with the
Commission in December 1994. (See Note 2A of the Notes to Consolidated
Financial Statements. Also see Note 18 "Events (Unaudited) Subsequent to the
Auditors' Report Dated November 1, 1995.")
- 5 -
<PAGE>
On September 29, 1995, Peoples Gas and North Shore Gas filed petitions with
the Commission for approval of performance-based rate programs for gas costs.
(See Liquidity -- Regulatory Actions in Item 7.)
FEDERAL LEGISLATION AND REGULATION
The Company is a holding company as defined in the Public Utility Holding
Company Act of 1935 (Act). By Order entered on December 6, 1968 (Holding
Company Act Release No. 16233), the Securities and Exchange Commission, pursuant
to Section 3(a)(1) of the Act, exempted the Company and its subsidiary companies
as such from the provisions of the Act, other than Section 9(a)(2) thereof.
Most of the gas distributed by Peoples Gas and North Shore Gas is
transported to the utilities' distribution systems by interstate pipelines. In
their provision of gas sales services (gathering, transportation and storage
services, and gas supply) pipelines are regulated by the FERC under the Natural
Gas Act and the Natural Gas Policy Act of 1978. (See "Sales and Rates" and
"Current Gas Supply" in Item 1.)
The Company and its subsidiaries are subject to federal and state
environmental laws. Peoples Gas and North Shore Gas are conducting
environmental investigations and work at certain sites that were the location of
former manufactured gas plant operations. (See Note 3A of the Notes to
Consolidated Financial Statements.) In addition, North Shore Gas has received a
demand for payment of environmental response costs at a former mineral
processing site in Denver, Colorado. (See Note 3B of the Notes to Consolidated
Financial Statements.) Also, North Shore Gas was informed by the Illinois
Environmental Protection Agency (IEPA) that an enforcement action would be
brought against North Shore Gas for violating certain provisions of the Illinois
Environmental Protection Act which prohibit water pollution within the State of
Illinois. (See Note 3C of the Notes to Consolidated Financial Statements.)
In 1992, the FERC issued Order No. 636 and successor orders that required
substantial restructuring of the service obligations of interstate pipelines.
(See Notes 1J, 2A, and 2B of the Notes to Consolidated Financial Statements.)
ENVIRONMENTAL MATTERS
See Note 3 of the Notes to Consolidated Financial Statements.
CURRENT GAS SUPPLY
Peoples Gas and North Shore Gas have each entered into various long-term
and short-term firm gas supply contracts. When used in conjunction with
contract storage and Peoples Gas' company-owned storage and peak-shaving
facilities, such supply is deemed sufficient to meet current and foreseeable
peak and annual market requirements.
Although the Company believes North American supply to be sufficient to
meet U.S. market demands for the foreseeable future, it is unable to quantify or
otherwise make specific representations regarding national supply availability.
- 6 -
<PAGE>
The following tabulation shows the expected design peak-day availability of
gas in thousands of dekatherms (MDth) during the 1995-1996 heating season for
Peoples Gas and North Shore Gas:
<TABLE>
<CAPTION>
Peoples Gas North Shore Gas
----------------------------------- -----------------------------------
Design Peak-Day Year of Design Peak-Day Year of
Availability Contract Availability Contract
(MDth) Expiration (MDth) Expiration
-------------------- ----------- -------------------- ----------
<S> <C> <C> <C> <C>
Firm direct purchases (1) 704 1996-2000 106 1996-2000
Liquefied petroleum 40 40 (2)
Storage gas:
Leased (3) 563 1998-2000 165 1998-2000
Peoples-Manlove (4) 1,017 63 (5)
Customer-owned (6) 170 25
----- ---
Total expected design
peak-day availability 2,494 399
----- ---
----- ---
</TABLE>
(1) Consists of firm gas purchases from non-pipeline suppliers delivered
utilizing firm pipeline transportation. The majority of the gas purchase
contracts are negotiated annually. The term of the transportation
contracts varies with the longest term being 5 years.
(2) Reflects derating of capacity, as accepted by the Commission Staff in
Docket 91-0581.
(3) Consists of leased storage services required to meet design day
requirements with contract lengths varying from 3 to 5 year terms.
(4) Manlove Field, Peoples Gas' underground storage facility located near
Champaign, Illinois, has a seasonal top-gas capacity (excluding volumes
required to support late-season peaking requirements) of approximately
33,000 MDth, of which approximately 1,914 MDth is dedicated to North Shore
Gas. Peoples Gas also owns a liquefied natural gas (LNG) plant at Manlove
Field for the primary purpose of supporting late-season deliverability from
the storage facility. The LNG plant has a storage capacity of 2,000 MDth
and is capable of regasifying 300 MDth of gas per day. For the 1995-96
heating season, Manlove Field complex will have a maximum peak-day delivery
capability of approximately 1,080 MDth (including 63 MDth for the use of
North Shore Gas).
(5) The contract with Peoples Gas was for an initial term expiring May 1, 1990.
However, by its terms, the contract continues in effect unless canceled by
either party upon 120 days notice prior to April 30 of any year thereafter.
(6) Consists of gas supplies purchased directly from producers and marketers by
the utilities' commercial, industrial, and larger residential customers.
- 7 -
<PAGE>
The sources of gas supply (including gas transported for customers) in
thousands of dekatherms (MDth) for Peoples Gas and North Shore Gas for the three
fiscal years ended September 30, 1995, 1994 and 1993, were as follows:
<TABLE>
<CAPTION>
Peoples Gas North Shore Gas
--------------------------------------- --------------------------------------
1995 1994 1993 1995 1994 1993
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Natural Gas Pipeline Co. (a) -- 14,378 63,996 -- 2,384 12,293
Midwestern Gas
Transmission Company (b) -- -- 7,217 -- -- --
Other suppliers (c) 104,932 134,104 76,006 20,294 23,415 12,297
Synthetic natural gas (d) 7,622 8,350 9,723 -- -- --
Liquefied petroleum gas produced 14 30 14 9 79 61
Customer-owned gas-received 93,225 91,187 91,046 12,379 12,017 11,956
Underground storage-net 26,896 (2,196) (1,762) 3,059 (718) (80)
Company use, franchise
requirements, and
unaccounted-for gas (3,733) (4,261) (4,772) (636) (339) (381)
--------- --------- --------- ------ -------- ------
TOTAL (e) 228,956 241,592 241,468 35,105 36,838 36,146
------- ------- ------- ------ ------ ------
------- ------- ------- ------ ------ ------
</TABLE>
(a) The DMQ-1 supply contract terminated on November 30, 1993.
(b) The CD-1 supply contract terminated on August 31, 1993.
(c) The Company purchases significant quantities of gas directly from various
suppliers. Commencing December 1, 1993, Natural unbundled its rates and
all purchases are from non-pipeline suppliers.
(d) The SNG facility terminated production during fiscal 1995. (See Results of
Operations -- Other Matters -- SNG Plant Closing in Item 7.)
(e) See "Gas Sold and Transported" in Item 6.
SYNTHETIC NATURAL GAS SUPPLY
Peoples Gas owned and operated an SNG plant, the McDowell Energy Center,
located near Joliet, Illinois that used refinery fuel gas and a variety of
natural gas liquids, including ethane, naphtha, natural gasoline, normal butane,
propane, and ethane/propane mix as feedstock for the production of SNG. The SNG
facility terminated production in fiscal 1995. (See Results of Operations --
Other Matters -- SNG Plant Closing in Item 7.)
ITEM 2. PROPERTIES
All of the principal plants and properties of Peoples Gas and North Shore
Gas have been maintained in the ordinary course of business and are believed to
be in satisfactory operating condition. The distribution facilities serve the
City and other areas in Northeastern Illinois. Peoples Gas owns and operates an
underground gas storage reservoir and an LNG plant at Manlove Field located near
Champaign, Illinois. Peoples Gas also owns a transmission system that
transports gas from Manlove Field to Chicago. The underground storage reservoir
and LNG plant also serve North Shore Gas. General properties include a
substantial investment in office and service buildings, garages, repair shops,
and motor vehicles, together with the equipment, tools, and fixtures necessary
to conduct utility business. (See also Results of Operations -- Other Matters
- -- SNG Plant Closing in Item 7.)
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<PAGE>
Most of the principal plants and properties of Peoples Gas and North Shore
Gas, other than mains, services, meters, regulators, and cushion gas in
underground storage, are located on property owned in fee. Substantially all
gas mains are located under public streets, alleys, and highways, or under
property owned by others under grants of easements. Meters and house regulators
in use and a portion of services are located on premises being served. Certain
SNG facilities, certain storage wells and other facilities of the Manlove Field
storage reservoir, and certain portions of the transmission system are located
on land held pursuant to leases, easements, or permits.
Substantially all of the physical properties now owned or hereafter
acquired by Peoples Gas and North Shore Gas are subject to (a) the first-
mortgage lien of each company's mortgage to First Trust of Illinois, National
Association, as Trustee, to secure the principal amount of each company's
outstanding first mortgage bonds, respectively, and (b) in certain cases, other
exceptions and defects that do not interfere with the use of the property.
ITEM 3. LEGAL PROCEEDINGS
See Notes 2, 3, and 4 of the Notes to Consolidated Financial Statements.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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<PAGE>
EXECUTIVE OFFICERS OF THE COMPANY
The following is a list of the names, ages, and positions of the executive
officers of the Company. Executive officers are elected to serve for a term of
one year or until their successors are duly elected and qualified.
Age at
Name 11-30-95 Position with the Company
- ---------------------- -------- ---------------------------------------------
Kenneth S. Balaskovits 53 Vice President and Controller (1993) of the
Company.
Mr. Balaskovits is also Vice President and
Controller and Director (1993) of Peoples Gas
and North Shore Gas. Mr. Balaskovits has
been an employee of the Company and/or its
subsidiaries since 1967.
Emmet P. Cassidy 62 Secretary and Treasurer (1989) of the
Company.
Mr. Cassidy is also Secretary and Treasurer
(1989) of Peoples Gas and North Shore Gas.
Prior to that, he was Assistant Secretary and
Assistant Treasurer of the Company and both
subsidiaries (1981-1989). Mr. Cassidy has
been an employee of the Company and/or its
subsidiaries since 1955.
J. Bruce Hasch 57 President and Chief Operating Officer (1990)
and Director (1987) of the Company.
Mr. Hasch is also President and Chief
Operating Officer (1990) and a Director
(1986) of Peoples Gas and North Shore Gas.
Prior to becoming President, Mr. Hasch was
Executive Vice President (1985-1990) of the
Company and its subsidiaries and Vice
President (1981-1985) of both subsidiary
companies. Mr. Hasch has been an employee of
the Company and/or its subsidiaries since
1960, including 16 years with Natural Gas
Pipeline Company of America, a former
subsidiary.
James Hinchliff 55 Senior Vice President and General Counsel
(1989) of the Company.
Mr. Hinchliff is also Senior Vice President
and General Counsel (1989) and a Director
(1985) of Peoples Gas and North Shore Gas.
Prior to that, he was Vice President and
General Counsel (1984-1989) of the Company
and of both subsidiaries, and he was
Assistant General Counsel of the Company
(1979-1984) and of both subsidiaries (1981-
1984). Mr. Hinchliff has been an employee of
the Company and/or its subsidiaries since
1972.
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<PAGE>
Age at
Name 11-30-95 Position with the Company
- ---------------------- -------- ---------------------------------------------
Michael S. Reeves 60 Executive Vice President (1987) and Director
(1991) of the Company.
Mr. Reeves is also Executive Vice President
(1987) and Director (1988) of Peoples Gas and
North Shore Gas. Prior to becoming Executive
Vice President, Mr. Reeves was Vice President
(1977-1987) of both subsidiaries. Mr. Reeves
has been an employee of the Company and/or
its subsidiaries since 1956.
Richard E. Terry 58 Chairman of the Board and Chief Executive
Officer (1990) and Director (1984) of the
Company.
Mr. Terry is also Chairman of the Board and
Chief Executive Officer (1990) and a Director
(1982) of Peoples Gas and North Shore Gas.
Prior to becoming Chairman, Mr. Terry was
President and Chief Operating Officer (1987-
1990), Executive Vice President (1984-1987),
and Vice President and General Counsel (1981-
1984) of the Company and its subsidiaries.
Mr. Terry has been an employee of the Company
and/or its subsidiaries since 1972.
- 11 -
<PAGE>
PART II
ITEM 5. MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
The common stock of the Company is listed on the New York, Chicago, and
Pacific Stock Exchanges (trading symbol: PGL). At November 30, 1995, there were
30,276 registered shareholders.
The common stock price range and dividends declared per common share by
quarters for fiscal 1995 and 1994 are as follows:
<TABLE>
<CAPTION>
Stock Price
Fiscal ---------------------------- Dividends
Quarters High Low Close Declared
-------- ------- ------- ------- --------
<S> <C> <C> <C> <C>
1995
----
Fourth $28-3/8 $25-3/8 $27-1/2 $.45
Third 27-1/8 24-3/4 25-7/8 .45
Second 27-7/8 24-1/4 25 .45
First 28-3/4 23-5/8 26-1/8 .45
1994
----
Fourth $27-3/8 $23-5/16 $26-1/4 $.45
Third 31-1/4 23-3/8 23-3/8 .45
Second 32-1/8 27 27-3/8 .45
First 32-1/2 27-1/2 30-1/2 .445
</TABLE>
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<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
For fiscal years ended September 30, 1995 1994 1993 1992 1991
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
COMMON STOCK INFORMATION
Earnings per share $ 1.78 $ 2.13 $ 2.11 $ 2.06 $ 2.05
Cash dividends declared per share $ 1.80 $ 1.795 $ 1.775 $ 1.75 $ 1.705
Book value per share at year-end $ 18.38 $ 18.39 $ 18.05 $ 17.72 $ 16.95
Average shares outstanding (thousands) 34,901 34,854 34,809 34,151 32,741
- -----------------------------------------------------------------------------------------------------------------------------
OPERATING RESULTS (thousands)
Operating Revenues:
Residential $ 752,796 $ 951,037 $ 929,407 $ 784,677 $ 791,758
Commercial 116,113 160,912 156,377 132,456 144,135
Industrial 24,128 41,979 41,354 34,595 41,355
Transportation of customer-owned gas (a) 122,814 110,128 117,949 132,745 115,720
Other 17,550 15,432 13,854 12,279 10,735
- -----------------------------------------------------------------------------------------------------------------------------
Total Operating Revenues $1,033,401 $1,279,488 $1,258,941 $1,096,752 $1,103,703
Less -- Gas costs 457,436 669,039 646,351 531,845 564,899
-- Revenue taxes 109,720 132,734 131,673 118,265 118,640
- -----------------------------------------------------------------------------------------------------------------------------
Net Operating Revenues $ 466,245 $ 477,715 $ 480,917 $ 446,642 $ 420,164
Net Income $ 62,154 $ 74,399 $ 73,375 $ 70,384 $ 66,975
- -----------------------------------------------------------------------------------------------------------------------------
ASSETS AT YEAR-END (thousands)
Property, plant and equipment $2,088,277 $2,019,379 $1,950,981 $1,843,603 $1,746,851
Less -- Accumulated depreciation 715,208 677,447 632,965 599,965 565,626
- -----------------------------------------------------------------------------------------------------------------------------
Net Property, Plant and Equipment $1,373,069 $1,341,932 $1,318,016 $1,243,638 $1,181,225
Total assets $1,822,492 $1,809,286 $1,765,870 $1,615,758 $1,541,447
Capital expenditures -- construction $ 95,941 $ 87,218 $ 131,669 $ 118,084 $ 101,563
- -----------------------------------------------------------------------------------------------------------------------------
CAPITALIZATION AT YEAR-END (thousands)
Common equity $ 641,694 $ 641,378 $ 628,451 $ 616,271 $ 555,199
Preferred stock of subsidiaries -- -- -- 12,850 16,750
Long-term debt of subsidiaries 621,874 626,075 528,075 489,553 493,038
- -----------------------------------------------------------------------------------------------------------------------------
Total Capitalization $1,263,568 $1,267,453 $1,156,526 $1,118,674 $1,064,987
- -----------------------------------------------------------------------------------------------------------------------------
FINANCIAL RATIOS (per cent)
Capitalization at Year-end:
Common equity 51 51 54 55 52
Preferred stock of subsidiaries -- -- -- 1 2
Long-term debt of subsidiaries 49 49 46 44 46
- -----------------------------------------------------------------------------------------------------------------------------
Total Capitalization 100 100 100 100 100
Return on common equity at year-end 9.7 11.6 11.7 11.4 12.1
- -----------------------------------------------------------------------------------------------------------------------------
GAS SOLD AND TRANSPORTED (thousands of dekatherms)
- -----------------------------------------------------------------------------------------------------------------------------
Gas Sales:
Residential 130,571 142,876 144,199 142,759 137,881
Commercial 22,079 26,206 26,185 26,239 27,429
Industrial 5,059 7,325 7,623 7,330 8,572
Transportation of customer-owned gas (a) 106,352 102,023 99,607 99,185 94,109
- -----------------------------------------------------------------------------------------------------------------------------
Total Gas Sales and Transportation 264,061 278,430 277,614 275,513 267,991
Margin per Dth delivered $ 1.77 $ 1.72 $ 1.73 $ 1.62 $ 1.57
- -----------------------------------------------------------------------------------------------------------------------------
NUMBER OF CUSTOMERS (average)
Residential 906,881 905,461 904,316 904,374 901,112
Commercial 50,872 50,955 50,736 50,567 49,676
Industrial 3,783 3,927 4,069 3,938 3,870
Transportation (a) 10,934 10,247 9,734 9,500 9,963
- -----------------------------------------------------------------------------------------------------------------------------
Total Customers 972,470 970,590 968,855 968,379 964,621
- -----------------------------------------------------------------------------------------------------------------------------
DEGREE DAYS 5,897 6,701 6,679 6,320 5,927
Per cent of normal (6,536) 90 103 102 97 91
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Includes commercial, industrial, and larger residential customers.
-13-
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
RESULTS OF OPERATIONS
NET INCOME
Net income decreased $12.2 million, to $62.2 million, in fiscal 1995 from
1994, due principally to weather that was 12 per cent warmer than in 1994,
decreasing net income by $11.9 million. Also contributing to the year-to-year
earnings decline were increases in interest expense and certain operation and
maintenance expenses, together with an adjustment to income tax expense in the
prior period. Partially offsetting these items was a decrease in the provision
for uncollectible accounts, due mainly to lower revenues. In addition, fiscal
1995 benefited from the sale of certain oil and gas rights.
In 1994, net income increased $1 million, to $74.4 million. Results for
the fiscal year included the recording of one-half of an Internal Revenue
Service (IRS) income tax settlement that increased net income by $10.8 million.
(See Note 9D of the Notes to Consolidated Financial Statements.) However, this
benefit was largely offset by increased operating costs related to the provision
for uncollectible accounts, labor, and depreciation.
Earnings for fiscal 1996 are expected to be positively affected by Peoples
Gas' and North Shore Gas' higher rates for service that were put into effect in
November 1995. (See Note 2A of the Notes to Consolidated Financial Statements.
Also see Note 18 "Events (Unaudited) Subsequent to the Auditors' Report Dated
November 1, 1995.")
A summary of variations affecting income between years is presented below,
with explanations of significant differences following:
<TABLE>
<CAPTION>
Fiscal 1995 Fiscal 1994
over 1994 over 1993
---------------------- ----------------------
Amount Amount
(000's) Per Cent (000's) Per Cent
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net operating revenues (a) $(11,470) (2.4) $(3,202) (0.7)
Operation and maintenance expenses (17,886) (6.9) 9,930 4.0
Depreciation expense 1,724 2.7 3,877 6.4
Income taxes 503 1.6 (5,513) (14.7)
Other income (9,354) (45.0) 14,450 227.7
Income deductions 5,830 12.1 2,199 4.8
Net income (12,245) (16.5) 1,024 1.4
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(a) Operating revenues, net of gas costs and revenue taxes.
NET OPERATING REVENUES
Gross revenues of Peoples Gas and North Shore Gas are affected by changes
in the unit cost of the subsidiaries' gas purchases and do not include the cost
of gas supplies for customers who purchase gas directly from producers and
marketers rather than from the subsidiaries. The direct customer purchases have
no effect on net income because the utilities provide transportation service for
such gas volumes and recover margins similar to those applicable to conventional
gas sales. Changes in the unit cost of gas do not significantly affect net
income because the utilities' tariffs provide for dollar-for-dollar recovery of
gas costs. (See Note 1J of the Notes to Consolidated Financial Statements.)
The utilities' tariffs also provide for dollar-for-dollar recovery of the cost
of revenue taxes imposed by the state and various municipalities.
-14-
<PAGE>
Since income is not significantly affected by changes in revenue from
customers' gas purchases from producers or marketers rather than from the
subsidiaries, changes in gas costs, or changes in revenue taxes, the discussion
below pertains to "net operating revenues" (operating revenues, net of gas costs
and revenue taxes). The Company considers net operating revenues to be a more
pertinent measure of operating results than gross revenues.
Net operating revenues decreased $11.5 million, to $466.2 million, due
primarily to a decline in natural gas deliveries of 14.4 Bcf, to 264.1 Bcf,
reflecting weather that was 12 per cent warmer than in 1994 and 10 per cent
warmer than normal.
In 1994, net operating revenues amounted to $477.7 million, virtually flat
as compared with fiscal 1993, reflecting natural gas deliveries that were
essentially at the same level in both periods. The total fiscal 1994 weather
impact was comparable with fiscal 1993. Customers' energy conservation measures
had a negative effect in 1994.
See Other Matters -- Operating Statistics for details of selected financial
and operating information by gas service classification.
OPERATION AND MAINTENANCE EXPENSES
Operation and maintenance expenses decreased $17.9 million, to $240.8
million, in 1995, due chiefly to recognizing approximately $14 million for the
fiscal 1995 portion of the IRS settlement (see Note 9D of the Notes to
Consolidated Financial Statements), and a decrease in the provision for
uncollectible accounts of $9.3 million, reflecting reduced sales revenues from
lower gas costs and warmer weather. These items were partially offset by
increased expenses for reengineering activities ($2.8 million) and the
distribution system ($2.6 million).
In 1994, operation and maintenance expenses increased $9.9 million, to
$258.7 million, due mainly to an increase in Peoples Gas' provision for
uncollectible accounts and higher labor costs that arose mainly from weather-
related overtime work and from start-up costs for new customer-service programs.
Partially offsetting these items were a reduced workforce and lower employee
benefits expenses for pensions and group insurance. Fiscal 1994 results reflect
an increase of $9.5 million in the provision for uncollectible accounts.
Without the increase in the provision for uncollectible accounts, operation and
maintenance expenses would have increased by $461,000 over fiscal 1993 levels.
DEPRECIATION EXPENSE
Depreciation expense increased $1.7 million, to $66.4 million, in 1995, and
$3.9 million, to $64.7 million, in 1994, due mainly to depreciable property
additions.
INCOME TAXES
Income taxes increased $503,000, to $32.6 million, due primarily to the
recording of the deferred tax effects of the income tax settlement in operating
expenses in 1995 together with an adjustment made in 1994 to reduce taxes
accrued. Also, the amortization of deferred tax credits was lower in 1995.
These increases were largely offset by decreased pre-tax income in 1995.
In 1994, income taxes decreased $5.5 million, to $32.1 million, due
principally to lower pre-tax income.
-15-
<PAGE>
OTHER INCOME
Other income declined $9.4 million, to $11.4 million, in 1995, due
principally to the 1994 recognition of the IRS settlement of $10.8 million after
income taxes. (See Notes 9D and 11 of the Notes to Consolidated Financial
Statements.) Also, the current fiscal year reflects lower interest income
($2.4 million) on amounts recoverable from customers and the absence of the
prior year's interest ($1.1 million) from proceeds held in a trust fund
generated from Peoples Gas' December 1993 bond issuance. These decreases
were partially offset by higher interest income ($5.4 million) resulting from
larger cash balances and higher interest rates.
In 1994, other income increased $14.5 million, to $20.8 million, due
primarily to recording the aforementioned IRS settlement. Also, the fiscal year
included higher interest income reflecting larger cash balances and the December
1993 bond issuance.
INCOME DEDUCTIONS
Income deductions increased $5.8 million, to $54 million, in 1995, due
mainly to increased interest expense on the following items: amounts refundable
to customers, long-term debt, and budget accounts.
In 1994, income deductions rose by $2.2 million, to $48.2 million, due
primarily to increased interest on long-term debt reflecting additional debt
outstanding.
OTHER MATTERS
EFFECT OF WEATHER. Weather variations affect the volumes of gas delivered for
heating purposes and, therefore, can have a significant positive or negative
impact on net income and coverage ratios.
ACCOUNTING STANDARDS. Effective October 1, 1993, the Company adopted Statement
of Financial Accounting Standards (SFAS) No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions." This statement requires the
accrual of the expected costs of such benefits during the employees' years of
service. (See Note 8B of the Notes to Consolidated Financial Statements.)
Effective October 1, 1994, the Company adopted SFAS No. 112, "Employers'
Accounting for Postemployment Benefits." This statement requires the accrual of
certain benefits provided to former or inactive employees after employment but
before retirement. (See Note 8C of the Notes to Consolidated Financial
Statements.)
FERC ORDER 636 COSTS. In 1992, the FERC issued Order No. 636 and successor
orders that required substantial restructuring of the service obligations of
interstate pipelines. (See Notes 1J, 2A, and 2B of the Notes to Consolidated
Financial Statements.)
On September 15, 1993, the Commission entered an order initiating an
investigation into the appropriate means of recovery by Illinois gas utilities
of pipeline charges for FERC Order 636 transition costs. The Illinois Appellate
Court affirmed the Commission's order on rehearing on September 21, 1995. (See
Notes 1J, 2A, and 2B of the Notes to Consolidated Financial Statements.)
REENGINEERING STUDY. Peoples Gas and North Shore Gas are undertaking a major
project to reengineer their business processes with the goal of increasing
efficiency, responsiveness to customer needs, and cost effectiveness. The
project commenced in September 1994 and is expected to continue for at least two
years.
-16-
<PAGE>
SNG PLANT CLOSING. Peoples Gas has closed its synthetic gas-making plant
located near Joliet, Illinois. The decision was effected after a cost-benefit
analysis was performed, which showed that, as of December 1, 1995, it no longer
would be cost-effective to use the plant as a source of gas, given new, more
economical supply arrangements that will take effect this winter. Those supply
arrangements are the result of initiatives undertaken by the utilities to
restructure their gas supply portfolios in response to FERC Order 636. The
rates approved by the Commission in Peoples Gas' most recent rate case reflect
the annual effect of a five-year amortization of the undepreciated investment in
the plant and decommissioning expenses.
OPERATING STATISTICS. The following table represents gas distribution margin
components:
<TABLE>
<CAPTION>
For fiscal years ended September 30,
--------------------------------------
1995 1994 1993
-------- ---------- ----------
<S> <C> <C> <C>
Operating Revenues (thousands):
Gas sales
Residential $752,796 $ 951,037 $ 929,407
Commercial 116,113 160,912 156,377
Industrial 24,128 41,979 41,354
-------- ---------- ----------
893,037 1,153,928 1,127,138
-------- ---------- ----------
Transportation
Residential 37,850 35,487 38,663
Commercial 50,318 45,819 48,510
Industrial 34,646 28,822 30,776
-------- ---------- ----------
122,814 110,128 117,949
-------- ---------- ----------
Other 17,550 15,432 13,854
-------- ---------- ----------
Total Operating Revenues 1,033,401 1,279,488 1,258,941
Less -- Gas Costs 457,436 669,039 646,351
-- Revenues Taxes 109,720 132,734 131,673
-------- ---------- ----------
Net Operating Revenues $466,245 $ 477,715 $ 480,917
-------- ---------- ----------
-------- ---------- ----------
Deliveries (MDth):
Gas Sales
Residential 130,571 142,876 144,199
Commercial 22,079 26,206 26,185
Industrial 5,059 7,325 7,623
-------- ---------- ----------
157,709 176,407 178,007
-------- ---------- ----------
Transportation
Residential 24,811 25,066 25,269
Commercial 41,648 41,607 40,269
Industrial 39,893 35,350 34,069
-------- ---------- ----------
106,352 102,023 99,607
-------- ---------- ----------
Total Gas Sales
and Transportation 264,061 278,430 277,614
-------- ---------- ----------
-------- ---------- ----------
Margin per Dth delivered $ 1.77 $ 1.72 $ 1.73
</TABLE>
-17-
<PAGE>
LIQUIDITY
SOURCE OF FUNDS. The Company has access to outside capital markets and to
internal sources of funds that together provide sufficient resources to meet
capital requirements. It does not anticipate any changes that would materially
alter its current liquidity position.
Due to the seasonal nature of gas usage, a major portion of cash
collections occurs between December and May. Because of timing differences in
the receipt and disbursement of cash and the level of construction requirements,
the utility subsidiaries may borrow on a short-term basis. Short-term
borrowings are repaid with cash from operations, other short-term borrowings, or
refinanced on a permanent basis with debt or equity, depending on capital market
conditions and capital structure considerations.
CREDIT LINES. The utility subsidiaries have lines of credit of $131.1 million.
At September 30, 1995, the utility subsidiaries had unused credit available from
banks of $130.2 million. (See Note 13 of the Notes to Consolidated Financial
Statements.)
CASH FLOW ACTIVITIES. Net cash provided by operating activities in 1995
increased by $22.9 million, due primarily to changes related to gas in storage,
other assets, and deferred income taxes. These items were offset, in part, by
reductions in gas costs recoverable and net receivables. In 1994, net cash
provided by operating activities increased by approximately $83.5 million, due
mainly to changes related to net receivables, gas costs recoverable, and gas
sales revenue refundable. Such items were partially offset by decreases
associated with deferred credits and accounts payable.
Net cash used in investing activities for 1995, 1994, and 1993 mainly
represents the level of capital expenditures in the respective years.
Net cash used in financing activities in 1995 includes drawdowns for
utility construction activities of the remaining balance of the trust fund
associated with prior financing. In 1994, net cash used in financing activities
reflects the new debt issues during the year, primarily used for construction
projects. Net cash provided by financing activities in 1993 includes the debt
issuance during the period, primarily to refund previously issued debt and
preferred stock.
INDENTURE RESTRICTIONS. North Shore Gas' indenture relating to its first
mortgage bonds contains provisions and covenants restricting the payment of cash
dividends and the purchase or redemption of capital stock. At September 30,
1995, such restrictions amounted to $11.6 million out of North Shore Gas' total
retained earnings of $62 million. (See Note 5 of the Notes to Consolidated
Financial Statements.)
DISTRICT ENERGY. Peoples District Energy is a 50 per cent participant in a
partnership, Trigen-Peoples District Energy Company, that provides district
energy services to the McCormick Place exposition and convention center in
Chicago, Illinois. The partnership also intends to offer district energy
services to other large buildings in Chicago. The other partner is a subsidiary
of Trigen Energy Corporation (Trigen), a company whose primary business is
constructing and operating district energy facilities. Neither the partnership
nor its partners are regulated as a public utility. The Company and Trigen have
each provided two joint and several limited guarantees to the owner and operator
of McCormick Place and also have certain limited obligations to the partnerships
lender under a Sponsors Support and Equity Contribution Agreement. (See Note 6
of the Notes to Consolidated Financial Statements.)
INTEREST COVERAGE. The fixed charges coverage ratios for Peoples Gas for fiscal
1995, 1994, and 1993 were 2.76, 3.28, and 3.57, respectively. The corresponding
coverage ratios for North Shore Gas for the same periods were 2.93, 3.33, and
2.91, respectively. The decrease in the ratio for the current fiscal year
-18-
<PAGE>
for each company primarily reflects lower pre-tax income resulting from warmer
weather. (See Results of Operations -- Net Income.) In addition, the ratios for
fiscal years 1995 and 1994 for both utility subsidiaries reflect the recording
of an IRS settlement in income. (See Note 9D of the Notes to Consolidated
Financial Statements.)
DEBT RATINGS. The long-term debt of both utility subsidiaries is rated Aa3 by
Moody's Investors Service and AA- by Standard & Poor's Corporation. There has
been no change in these ratings since fiscal 1985. The commercial paper of both
utilities has the top rating from the major rating agencies.
ENVIRONMENTAL MATTERS. The Company's utility subsidiaries are conducting
environmental investigations and work at certain sites that were the location of
former manufactured gas operations. (See Note 3A of the Notes to Consolidated
Financial Statements.)
In February 1994, North Shore Gas received a demand from a responsible
party under the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended (CERCLA) for reimbursement, indemnification and
contribution for response costs incurred at a former mineral processing site in
Denver, Colorado. In November 1994, North Shore Gas filed a declaratory
judgment action asking the court to declare that North Shore Gas is not liable
for response costs relating to the site. (See Note 3B of the Notes to
Consolidated Financial Statements.)
In June 1995, North Shore Gas was informed by the IEPA that an enforcement
action would be brought against North Shore Gas for violating certain provisions
of the Illinois Environmental Protection Act which prohibit water pollution
within the State of Illinois. According to the IEPA, the alleged violations
occurred as the result of a gasoline spill that occurred in Wheeling, Illinois
during June 1992 when a contractor who was installing a pipeline for North Shore
Gas accidentally struck a gasoline pipeline owned by West Shore Pipeline
Company. North Shore Gas is currently evaluating this matter. (See Note 3C of
the Notes to Consolidated Financial Statements.)
REGULATORY ACTIONS. In 1992, the Commission issued an order in its consolidated
proceedings, initiated in 1991, regarding the appropriate ratemaking treatment
of environmental costs relating to past manufactured gas operations incurred by
Illinois utilities, including Peoples Gas and North Shore Gas. In its order,
the Commission approved rate recovery of such environmental costs but required
that the recovery occur over a five-year period without recovery of carrying
charges on unrecovered balances. The part of the Commission's order that
disallowed recovery of carrying charges on unrecovered balances has been
reversed on appeal by the Illinois Supreme Court, which has remanded the case to
the Commission. (See Note 2A of the Notes to Consolidated Financial Statements.
Also see Note 18 "Events (Unaudited) Subsequent to the Auditors' Report Dated
November 1, 1995.")
Peoples Gas and North Shore Gas filed proposed changes in rates with the
Commission in December 1994. (See Note 2A of the Notes to Consolidated
Financial Statements. Also see Note 18 "Events (Unaudited) Subsequent to the
Auditors' Report Dated November 1, 1995.")
On September 29, 1995, Peoples Gas and North Shore Gas filed petitions with
the Commission for approval of performance-based rate programs (PBR Programs)
for gas costs. The objectives of the PBR Programs are to provide incentives to
minimize gas supply and capacity costs in a changing market and to pursue
innovative gas supply-related opportunities. Under specified conditions and up
to certain limits, Peoples Gas and North Shore Gas would share equally with gas
sales customers the savings or costs from these programs. The PBR Programs
would be for a pilot period covering fiscal years 1996 through 1998 and were
filed pursuant to a new provision of the Illinois Public Utilities Act which
allows experiments in performance-based rates. The Commission has commenced
hearings on the PBR Program proposals.
-19-
<PAGE>
CAPITAL RESOURCES
CAPITAL SPENDING. Capital expenditures for additions, replacements, and
improvements to the utility plant were $95.9 million in 1995, $87.2 million in
1994, and $131.7 million in 1993.
Expenditures in fiscal 1995 increased $8.7 million over 1994 and included
$11.2 million for computer and office equipment.
The decline in fiscal 1994 expenditures from 1993 was partly the result of
completing certain major projects that were undertaken to enhance gas supply.
Expenditures in 1994 included $9 million for enhancement of Peoples Gas'
underground storage site. Expenditures for that project in fiscal 1993 amounted
to $10.7 million.
Additional expenditures in fiscal 1993 included $7.7 million for a
liquefied natural gas vaporizer replacement project at Manlove Field and $9
million to complete the second pipeline supply connection for North Shore Gas.
Capital expenditures for fiscal 1996 are expected to be about $94.4
million, a decrease of $1.5 million from the 1995 level. The estimate of
expenditures for 1996 includes a continuation of Peoples Gas' cast iron main
replacement program.
Fiscal 1996 sinking fund requirements for long-term debt are $4 million for
North Shore Gas. (See Note 14C of the Notes to Consolidated Financial
Statements.)
The Company anticipates that the subsidiaries' future cash needs for
capital expenditures and sinking fund requirements and maturities will be met
through internally generated funds, intercompany loans from the Company,
borrowing arrangements with banks and/or the issuance of commercial paper on
an interim basis, and periodic long-term financing involving equity or the
subsidiaries' first mortgage bonds.
BONDS ISSUED. On March 30, 1993, North Shore Gas filed a shelf registration
with the Securities and Exchange Commission (SEC) for the issuance of $40
million aggregate principal amount of first mortgage bonds. In May 1993, North
Shore Gas issued a portion of those first mortgage bonds in an aggregate
principal amount of $15 million at 6.37 per cent, due May 1, 2003. (See Note
14A of the Notes to Consolidated Financial Statements.)
On June 29, 1995, the City of Chicago issued $50 million aggregate
principal amount of 6.10 per cent gas supply refunding revenue bonds, 1995
Series A, which were collateralized by an equal amount of Peoples Gas' 30-year
first mortgage bonds. On August 1, 1995, the proceeds were used to redeem
$50 million aggregate principal amount of previously issued gas supply revenue
bonds. Other funds provided by Peoples Gas were used for the payment of
expenses of issuance, including the underwriters' fee. (See Note 14A of the
Notes to Consolidated Financial Statements.)
Additional bonds are issuable by the utility subsidiaries, upon approval by
the Commission, subject to limitations imposed by certain restrictive provisions
of the subsidiaries' open-end mortgages and supplements thereto. These
restrictions are not expected to have an impact on the subsidiaries' ability to
issue additional debt, as needed.
BONDS REDEEMED. On November 14, 1995, Peoples Gas notified the trustee of its
intention to redeem approximately $87 million aggregate principal amount of
Series U and V gas supply revenue bonds. Such redemption, from general
corporate funds, is expected to be completed on December 29, 1995.
-20-
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
PAGE
----
Statement of Management's Responsibility 22
Report of Independent Public Accountants 23
Consolidated Statements of Income for fiscal years ended
September 30, 1995, 1994, and 1993 24
Consolidated Statements of Retained Earnings for fiscal
years ended September 30, 1995, 1994, and 1993 24
Consolidated Statements of Cash Flows for fiscal years ended
September 30, 1995, 1994, and 1993 25
Consolidated Balance Sheets at September 30, 1995 and 1994 26
Consolidated Capitalization Statements at September 30, 1995
and 1994 27
Notes to Consolidated Financial Statements 28
-21-
<PAGE>
STATEMENT OF MANAGEMENT'S RESPONSIBILITY
The financial statements and other financial information included in this
report were prepared by management, who is responsible for the integrity and
objectivity of presented data. The consolidated financial statements of the
Company and its subsidiaries were prepared in conformity with generally accepted
accounting principles and necessarily include some amounts that are based on the
best estimates and judgments of management.
The Company maintains internal accounting systems and related
administrative controls, along with internal audit programs, that are designed
to provide reasonable assurance that the accounting records are accurate and
assets are safeguarded from loss or unauthorized use. Consequently, management
believes that the accounting records and controls are adequate to produce
reliable financial statements.
Arthur Andersen LLP, the Company's independent public accountants approved
by the shareholders, as a part of their audit of the financial statements,
selectively reviews and tests certain aspects of internal accounting controls
solely to determine the nature, timing, and extent of their audit tests.
Management has made available to Arthur Andersen LLP all of the Company's
financial records and related data and believes that all representations made to
the independent public accountants during their audit were valid and
appropriate.
The Audit Committee of the Board of Directors, comprised of six outside
directors, meets periodically with management, the internal auditors, and Arthur
Andersen LLP, jointly and separately, to assure that appropriate
responsibilities are discharged. These meetings include discussion and review
of accounting principles and practices, internal accounting controls, audit
results, and the presentation of financial information in the annual report.
-22-
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Shareholders of Peoples Energy Corporation:
We have audited the accompanying consolidated balance sheets and
consolidated capitalization statements of Peoples Energy Corporation (an
Illinois corporation) and subsidiary companies at September 30, 1995 and 1994,
and the related consolidated statements of income, retained earnings, and cash
flows for each of the three years in the period ended September 30, 1995. These
financial statements and the schedule referred to below are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements and schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Peoples Energy Corporation
and subsidiary companies at September 30, 1995 and 1994, and the results of
their operations and their cash flows for each of the three years in the period
ended September 30, 1995, in conformity with generally accepted accounting
principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The financial statement schedule listed
in Item 14(a)2 is presented for purposes of complying with the Securities and
Exchange Commission's rules and is not part of the basic financial statements.
The financial statement schedule has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion,
fairly states, in all material respects, the financial data required to be set
forth therein in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Chicago, Illinois
November 1, 1995
-23-
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME
Peoples Energy Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
For fiscal years ended September 30, 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
(Thousands, except per-share amounts)
<S> <C> <C> <C>
Operating Revenues:
Gas sales $ 893,037 $1,153,928 $1,127,138
Transportation of customer-owned gas 122,814 110,128 117,949
Other 17,550 15,432 13,854
- ------------------------------------------------------------------------------------------------------------------------------------
Total Operating Revenues 1,033,401 1,279,488 1,258,941
- ------------------------------------------------------------------------------------------------------------------------------------
Operating Expenses:
Gas costs 457,436 669,039 646,351
Operation (see Note 9D) 199,095 220,765 213,090
Maintenance 41,731 37,947 35,692
Depreciation 66,408 64,684 60,807
Taxes -- Income 32,556 32,053 37,566
-- State and local revenue 109,720 132,734 131,673
-- Other 21,700 20,450 20,719
- ------------------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses 928,646 1,177,672 1,145,898
- ------------------------------------------------------------------------------------------------------------------------------------
Operating Income 104,755 101,816 113,043
- ------------------------------------------------------------------------------------------------------------------------------------
Other Income:
Interest income 10,066 6,168 2,944
Miscellaneous (see Note 11) 1,376 14,628 3,402
- ------------------------------------------------------------------------------------------------------------------------------------
Total Other Income 11,442 20,796 6,346
- ------------------------------------------------------------------------------------------------------------------------------------
Gross Income 116,197 122,612 119,389
- ------------------------------------------------------------------------------------------------------------------------------------
Income Deductions:
Interest on long-term debt of subsidiaries 45,546 44,234 41,514
Other interest 7,457 3,012 2,945
Amortization of debt discount and expense 867 810 727
Preferred stock dividends of subsidiaries -- -- 719
Miscellaneous 173 157 109
- ------------------------------------------------------------------------------------------------------------------------------------
Total Income Deductions 54,043 48,213 46,014
- ------------------------------------------------------------------------------------------------------------------------------------
Net Income $ 62,154 $ 74,399 $ 73,375
- ------------------------------------------------------------------------------------------------------------------------------------
Average Shares of Common Stock Outstanding 34,901 34,854 34,809
Earnings Per Share of Common Stock $ 1.78 $ 2.13 $ 2.11
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
Peoples Energy Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
For fiscal years ended September 30, 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
(Thousands)
<S> <C> <C> <C>
Balance at Beginning of Year $ 365,258 $ 353,432 $ 342,267
Add -- Net Income 62,154 74,399 73,375
Deduct -- Dividends declared on common stock of $1.80,
$1.795, and $1.775 per share, respectively 62,831 62,573 61,796
-- Preferred stock redemption premiums
of a subsidiary -- -- 414
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at End of Year $ 364,581 $ 365,258 $ 353,432
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of
these statements.
-24-
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Peoples Energy Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
For fiscal years ended September 30, 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
(Thousands)
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net Income $ 62,154 $ 74,399 $ 73,375
Adjustments to reconcile net income to net cash:
Depreciation 66,408 64,684 60,807
Deferred income taxes and investment tax
credits - net 11,002 (11,334) 7,938
Change in deferred credits and other liabilities (9,968) (24,846) 28,395
Change in other assets (1,607) (19,753) (1,625)
Other 63 41 64
Change in current assets and liabilities:
Receivables - net 16,877 36,427 (51,568)
Accrued unbilled revenues (1,245) 10,116 (6,493)
Materials and supplies 7,389 1,797 1,474
Gas in storage 50,458 (6,000) (2,967)
Gas costs recoverable 8,221 37,100 (22,910)
Accounts payable (6,758) (9,085) 27,227
Customer gas service and credit deposits (4,843) 2,344 (5,385)
Accrued taxes (776) 1,022 11,772
Gas sales revenue refundable 28,559 42,723 (1,159)
Accrued interest (146) 2,571 459
Other (253) 390 (266)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Cash Provided by Operating Activities 225,535 202,596 119,138
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
Capital expenditures of subsidiaries - construction (95,941) (87,218) (131,669)
Other assets (1,603) (1,382) (3,516)
Other temporary cash investments (100) 100 (300)
Other long-term cash investments 5,982 (601) (278)
Other capital investments (123) 633 (1,578)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Cash Used in Investing Activities (91,785) (88,468) (137,341)
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
Interim loans of subsidiaries - net -- (67,700) 39,700
Issuance of long-term debt of subsidiaries 50,000 102,000 115,000
Trust fund - utility construction 31,493 (27,250) (4,243)
- bond redemption (237) -- --
Retirement of long-term debt of subsidiaries (54,201) (4,000) (74,811)
Redemption of preferred stock of subsidiaries -- (3,400) (11,814)
Dividends paid on common stock (62,810) (62,378) (61,601)
Proceeds from issuance of common stock 993 1,100 1,016
- ------------------------------------------------------------------------------------------------------------------------------------
Net Cash Provided by (Used in) Financing Activities (34,762) (61,628) 3,247
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents 98,988 52,500 (14,956)
Cash and Cash Equivalents at Beginning of Year 77,251 24,751 39,707
- ------------------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $ 176,239 $ 77,251 $ 24,751
- ------------------------------------------------------------------------------------------------------------------------------------
The Notes to Consolidated Financial Statements are an integral part of these statements.
</TABLE>
-25-
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
Peoples Energy Corporation
- ----------------------------------------------------------------------------------------------------------------
At September 30, 1995 1994
- ----------------------------------------------------------------------------------------------------------------
(Thousands)
PROPERTIES AND OTHER ASSETS
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CAPITAL INVESTMENTS:
Property, plant and equipment, at original cost $2,088,277 $2,019,379
Less - Accumulated depreciation 715,208 677,447
- ----------------------------------------------------------------------------------------------------------------
Net property, plant and equipment 1,373,069 1,341,932
Other investments 10,367 16,289
- ----------------------------------------------------------------------------------------------------------------
Total Capital Investments - Net 1,383,436 1,358,221
- ----------------------------------------------------------------------------------------------------------------
Current Assets:
Cash 3,328 3,667
Cash equivalents 172,911 73,584
Other temporary cash investments, at cost
that approximates market value 1,100 1,000
Trust fund - utility construction -- 31,493
- bond redemption 237 --
Receivables -
Customers, net of allowance for uncollectible
accounts of $19,013 and $24,289, respectively 56,715 73,959
Other 1,897 1,530
Accrued unbilled revenues 21,167 19,922
Materials and supplies, at average cost 16,466 23,855
Gas in storage, at last-in, first-out cost 100,547 151,005
Gas costs recoverable through rate adjustments 6,205 14,426
Prepayments 2,302 2,050
- ----------------------------------------------------------------------------------------------------------------
Total Current Assets 382,875 396,491
- ----------------------------------------------------------------------------------------------------------------
Other Assets:
Regulatory assets of subsidiaries (see Note 1B) 39,706 36,207
Deferred charges 16,475 18,367
- ----------------------------------------------------------------------------------------------------------------
Total Other Assets 56,181 54,574
- ----------------------------------------------------------------------------------------------------------------
Total Properties and Other Assets $1,822,492 $1,809,286
- ----------------------------------------------------------------------------------------------------------------
CAPITALIZATION AND LIABILITIES
- ----------------------------------------------------------------------------------------------------------------
Capitalization (see Consolidated Capitalization Statements) $1,263,568 $1,267,453
- ----------------------------------------------------------------------------------------------------------------
Current Liabilities:
Interim loans of subsidiaries 900 900
Accounts payable 102,377 109,135
Dividends payable on common stock 15,711 15,690
Customer gas service and credit deposits 40,577 45,420
Sinking fund payments and maturities, due within one year -
Long-term debt of subsidiaries 4,000 4,000
Accrued taxes 28,160 28,936
Gas sales revenue refundable through rate adjustments 79,502 50,943
Accrued interest 12,796 12,942
- ----------------------------------------------------------------------------------------------------------------
Total Current Liabilities 284,023 267,966
- ----------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Deferred income taxes - primarily accelerated depreciation (see Note 9B) 208,424 189,938
Investment tax credits being amortized over
the average lives of related property 38,132 39,887
Other 28,345 44,042
- ----------------------------------------------------------------------------------------------------------------
Total Deferred Credits and Other Liabilities 274,901 273,867
- ----------------------------------------------------------------------------------------------------------------
Total Capitalization and Liabilities $1,822,492 $1,809,286
- ----------------------------------------------------------------------------------------------------------------
The Notes to Consolidated Financial Statements are an integral part of these statements.
</TABLE>
-26-
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED CAPITALIZATION STATEMENTS
Peoples Energy Corporation
- ----------------------------------------------------------------------------------------------------------------
At September 30, 1995 1994
- ----------------------------------------------------------------------------------------------------------------
(Thousands, except number of shares)
<S> <C> <C>
Common Stockholders' Equity:
Common stock, without par value -
Authorized 60,000,000 shares
Outstanding 34,913,426 and 34,868,069 shares, respectively $ 277,113 $ 276,120
Retained earnings (see Consolidated Statements
of Retained Earnings) 364,581 365,258
- ----------------------------------------------------------------------------------------------------------------
Total Common Stockholders' Equity 641,694 641,378
- ----------------------------------------------------------------------------------------------------------------
Long-Term Debt:
Exclusive of sinking fund payments and maturities
due within one year
The Peoples Gas Light and Coke Company
First and Refunding Mortgage Bonds -
8% Series U, due June 1, 1999 43,375 43,375
8% Series V, due June 1, 1999 43,375 43,375
Adjustable-Rate Series W (4.2% and 3% through
September 30, 1995 and September 30, 1994, respectively),
due October 1, 1999 (see Note 14B) 10,400 10,400
6.875% Series X, due March 1, 2015 50,000 50,000
7.50% Series Y, due March 1, 2015 50,000 50,000
7.50% Series Z, due March 1, 2015 50,000 50,000
10-1/4% Series AA, due March 1, 2015
(redeemed on August 1, 1995 - see Note 14A) -- 50,000
8.10% Series BB, due May 1, 2020 75,000 75,000
6.37% Series CC, due May 1, 2003 75,000 75,000
5-3/4% Series DD, due December 1, 2023 75,000 75,000
Adjustable-Rate Series EE (4.95% and 2.55% through
November 30, 1995 and November 30, 1994, respectively),
due December 1, 2023 (see Note 14B) 27,000 27,000
6.10% Series FF, due June 1, 2025 (see Note 14A) 50,000 --
North Shore Gas Company
First Mortgage Bonds -
10.20% Series I, due October 27, 1997 8,000 12,000
8% Series J due November 1, 2020 24,774 24,925
6-3/8% Series K, due October 1, 2022 24,950 25,000
6.37% Series L, due May 1, 2003 (see Note 14A) 15,000 15,000
- ----------------------------------------------------------------------------------------------------------------
Total Long-Term Debt 621,874 626,075
- ----------------------------------------------------------------------------------------------------------------
Total Capitalization $1,263,568 $1,267,453
- ----------------------------------------------------------------------------------------------------------------
The Notes to Consolidated Financial Statements are an integral part of these statements.
</TABLE>
-27-
<PAGE>
PEOPLES ENERGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1A Principles of Consolidation
All subsidiaries are included in the consolidated financial statements.
All significant intercompany transactions have been eliminated in consolidation.
Certain items previously reported for years prior to 1995 have been reclassified
to conform with the current-year presentation.
1B Regulated Operations
Peoples Gas' and North Shore Gas' utility operations are subject to
regulation by the Commission. Regulated operations are accounted for in
accordance with SFAS No. 71, "Accounting for the Effects of Certain Types of
Regulation." This standard controls the application of generally accepted
accounting principles for companies whose rates are determined by an independent
regulator such as the Commission. Regulatory assets represent certain costs
that are expected to be recovered from customers through the ratemaking process.
When incurred, such costs are deferred as assets in the balance sheet and
subsequently recorded as expenses when those same amounts are reflected in
rates.
<TABLE>
<CAPTION>
The following regulatory assets were reflected in Other Assets in the
Consolidated Balance Sheets at September 30, 1995 and 1994:
- --------------------------------------------------------------------------------
1995 1994
- --------------------------------------------------------------------------------
(Thousands)
<S> <C> <C>
Environmental costs, net of recoveries (see Note 3A) $18,349 $17,505
Transition costs from pipeline supplier (see Note 2B) 8,000 11,300
Interest on gas sales revenue refundable 2,512 2,965
Regulatory income tax assets (see Note 1I) 3,680 1,965
Energy conservation plan expenses 1,136 1,054
Discount, premium, expenses, and loss on reacquired bonds 3,089 874
SNG plant - decommissioning 1,982 --
Other 958 544
- --------------------------------------------------------------------------------
Total regulatory assets of subsidiaries $39,706 $36,207
- --------------------------------------------------------------------------------
</TABLE>
1C Concentration of Credit Risk
Peoples Gas provides natural gas service to approximately 840,000 customers
within the City of Chicago. North Shore Gas provides natural gas service to
about 133,000 customers within approximately 275 square miles in Northeastern
Illinois. Credit risk for each utility is spread over a diversified base of
residential, commercial, and industrial retail sales and transportation
customers.
Peoples Gas and North Shore Gas encourage customers to participate in their
long-standing budget payment programs, which allow the cost of higher gas
consumption levels associated with the heating season to be spread over a 12-
month billing cycle. Customers payment records are continually monitored and
credit deposits are required, when appropriate, to minimize uncollectible write-
offs.
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<PAGE>
1D Revenue Recognition
Gas sales revenues for retail customers are recorded on the accrual basis
for all gas delivered during the month, including an estimate for gas delivered
but unbilled at the end of each month.
1E Property, Plant and Equipment
Property, plant and equipment is stated at original cost and includes
appropriate amounts of payroll taxes, employee benefit costs, administrative
costs, and an allowance for funds used during construction.
1F Maintenance and Depreciation
The Company's utility subsidiaries charge the cost of maintenance and
repairs of property and minor renewals and improvements of property to
maintenance expense. When depreciable property is retired, its original cost is
charged to the accumulated provision for depreciation.
The provision for depreciation substantially reflects the systematic
amortization of the original cost of depreciable property over estimated useful
lives on the straight-line method. Additionally, actual dismantling cost, net
of salvage, is included in the provision for depreciation in the month incurred.
The amounts provided are designed to cover not only losses due to wear and tear
that are not restored by maintenance, but also losses due to obsolescence and
inadequacy.
<TABLE>
<CAPTION>
The provision for depreciation, expressed as an annual percentage of
original cost of depreciable property, is as follows:
FOR FISCAL YEARS ENDED SEPTEMBER 30, 1995 1994 1993
------------------------------------ ---- ---- ----
<S> <C> <C> <C>
Peoples Gas 3.6% 3.6% 3.6%
North Shore Gas 3.1 3.2 3.1
Consolidated 3.5 3.6 3.6
</TABLE>
1G Statement of Cash Flows
For purposes of the balance sheet and the statement of cash flows, the
Company considers all short-term liquid investments with maturities of three
months or less to be cash equivalents.
<TABLE>
<CAPTION>
Income taxes and interest paid (excluding capitalized interest) were as
follows:
FOR FISCAL YEARS ENDED SEPTEMBER 30, 1995 1994 1993
------------------------------------ ------- ------- -------
(Thousands)
<S> <C> <C> <C>
Income taxes paid $16,448 $50,160 $25,343
Interest paid 47,732 44,970 43,730
</TABLE>
1H Accounts Payable
The Company utilizes controlled disbursement banking arrangements under
which certain bank accounts have negative book balances due to checks in
transit. The negative balances are classified as Accounts Payable.
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<PAGE>
1I Income Taxes
The Company follows the liability method of accounting for deferred income
taxes. Under the liability method, deferred income taxes have been recorded
using currently enacted tax rates for the differences between the tax basis of
assets and liabilities and the basis reported in the financial statements. Due
to the effects of regulation on Peoples Gas and North Shore Gas, certain
adjustments made to deferred income taxes are, in turn, debited or credited to
regulatory assets or liabilities. (See Note 9B.)
Each company within the consolidated group nets its income tax related
regulatory assets and liabilities. At September 30, 1995 and 1994, net
regulatory income tax assets recorded in Other Assets amounted to $3.7 million
and $2 million, while net regulatory income tax liabilities recorded in Other
Liabilities equaled $5.9 million and $6.3 million, respectively.
Investment tax credits have been deferred and are being amortized through
credits to income over the book lives of related property.
The preceding deferred-tax and tax-credit accounting conforms with
regulations of the Commission.
1J Recovery of Gas Costs, Including Charges for Transition Costs
Under the tariffs of Peoples Gas and North Shore Gas, the difference for
any fiscal year between costs recoverable through the Gas Charge and revenues
billed to customers under the Gas Charge is refunded or recovered over a 12-
month billing cycle beginning the following January 1. Consistent with these
tariff provisions, such difference for any month is recorded either as a current
liability or as a current asset (with a contra entry to Gas Costs), and the
fiscal year-end balance is amortized over the 12-month period beginning the
following January 1.
The Commission conducts annual proceedings regarding, for each gas utility,
the reconciliation of revenues from the Gas Charge and related costs incurred
for gas. In such proceedings, costs recovered by a utility through the Gas
Charge are subject to challenge. Such proceedings, regarding Peoples Gas for
fiscal years 1992 through 1995 and North Shore Gas for fiscal years 1991 through
1995, are currently pending before the Commission.
Pursuant to FERC Order No. 636 and successor orders, pipelines are allowed
to recover from their customers so-called transition costs. These costs arise
from the restructuring of pipeline service obligations required by the 636
Orders. The utilities are currently recovering pipeline charges for transition
costs through the Gas Charge. (See Notes 2A and 2B.)
1K Gas in Storage
Storage injections are priced at the fiscal-year average of costs of
natural gas purchased and SNG produced. Peoples Gas' SNG production costs
include costs of feedstock plus plant operation and maintenance costs. (See
Results of Operations - Other Matters - SNG Plant Closing.) Withdrawals from
storage are priced on the last-in, first-out (LIFO) cost method. The estimated
current replacement cost of gas in inventory at September 30, 1995 and 1994
exceeded the LIFO cost by approximately $134 million and $210 million,
respectively.
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<PAGE>
2. RATES AND REGULATION
2A Utility Rate Proceedings
PEOPLES GAS' RATE FILING. On December 16, 1994, Peoples Gas filed with the
Commission proposed changes in rates. Peoples Gas is seeking changes in rates
that are designed to increase annual revenues by about $41 million, exclusive of
additional charges for revenue taxes, based on a rate of return on original-cost
rate base of 9.55 per cent, which reflects an 11.8 per cent cost of common
equity.
On October 16, 1995, the Commission's hearing examiners issued a
recommended order under which Peoples Gas would receive a revenue increase of
approximately $32.3 million based on a 9.19 per cent rate of return on original
- -cost rate base, which reflects an 11.10 per cent cost of common equity.
The Commission is expected to issue its order no later than mid November 1995.
Peoples Gas cannot predict the outcome of its rate increase request.
NORTH SHORE GAS' RATE FILING. On December 16, 1994, North Shore Gas filed with
the Commission proposed changes in rates. North Shore Gas is seeking changes in
rates that are designed to increase annual revenues by about $6.7 million,
exclusive of additional charges for revenue taxes, based on a rate of return on
original-cost rate base of 9.97 per cent, which reflects an 11.7 per cent cost
of common equity.
On October 16, 1995, the Commission's hearing examiners issued a
recommended order under which North Shore Gas would receive a revenue increase
of approximately $5.5 million based on a 9.75 per cent rate of return on
original-cost rate base, which reflects an 11.30 per cent cost of common equity.
The Commission is expected to issue its order no later than mid November 1995.
North Shore Gas cannot predict the outcome of its rate increase request.
ENVIRONMENTAL COST RECOVERY. In 1992, the Commission issued an order in its
consolidated proceedings, initiated in 1991, regarding the appropriate
ratemaking treatment of environmental costs incurred by Illinois utilities,
including Peoples Gas and North Shore Gas, in connection with the investigation
and treatment of residues associated with past manufactured gas operations
("environmental costs"). In its order, the Commission approved rate recovery of
environmental costs over a five-year period, but required the utilities to
"share" the environmental costs by disallowing rate recovery of carrying charges
on unrecovered balances. Reimbursements of environmental costs from insurance
carriers or other entities are to be netted against costs and reflected in rates
over a five-year period. In 1992, several parties, including Peoples Gas and
North Shore Gas, appealed the Commission's order to the Illinois Appellate
Court. In 1993, the Third District Appellate Court issued its opinion affirming
the Commissions order in the consolidated proceedings, which decision was
subsequently appealed to the Illinois Supreme Court. In April 1995, the
Illinois Supreme Court upheld in part and reversed in part the Commission's
order. The Supreme Court upheld the Commission in ruling that environmental
costs are recoverable through rates. The Supreme Court also ruled that the
Commission's approval of a rate recovery method called a "rider" (the method
utilized by Peoples Gas and North Shore Gas) as the preferred mechanism for
recovery of environmental costs is within the Commission's authority. The
Supreme Court reversed the part of the Commission's order that required the
utilities to share environmental costs by disallowing recovery of carrying
charges on unrecovered balances. The order was remanded to the Commission for
further proceedings consistent with the Supreme Court's opinion. The Commission
has until December 20, 1995 to issue its order on remand. (See Note 3A.)
FERC ORDER 636 COST RECOVERY. On September 15, 1993, the Commission entered an
order initiating an investigation into the appropriate means of recovery by
Illinois gas utilities of pipeline charges for FERC Order 636 transition costs.
The Commission issued a final order in this proceeding on
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<PAGE>
March 9, 1994. The order provides for the full recovery of transition costs
from Peoples Gas' and North Shore Gas' gas service customers and transportation
customers to the extent they contract for firm standby service. The Citizens
Utility Board and State's Attorney of Cook County filed an application for
rehearing of the March 9 order with the Commission. In its orders on rehearing,
the Commission continued to provide for full recovery of transition costs, but
directed that, effective November 1, 1994, gas supply realignment (GSR) costs
(one of the four categories of transition costs) be recovered on a uniform
volumetric basis from all transportation and sales customers. In December 1994,
a group of industrial transportation customers of Illinois utilities appealed
the Commissions orders on rehearing to the Illinois Appellate Court. The
Illinois Appellate Court, on September 21, 1995, affirmed the Commission's
order. A group of industrial transportation customers of Illinois utilities
gave notice of their intent to appeal the Appellate Court's order to the
Illinois Supreme Court. If the Illinois Supreme Court accepts the appeal, any
change made by it to the Commission's order would have a prospective effect
only. (See Notes 1J and 2B.)
2B FERC Orders 636, 636-A, and 636-B
FERC Order 636 and successor orders require pipelines to make separate rate
filings to recover transition costs. There are four categories of such costs,
the largest of which for Peoples Gas and North Shore Gas is GSR costs. The
utilities are subject to charges for transition cost recovery by Natural Gas
Pipeline Company of America (Natural). Charges by Natural for transition costs
commenced on January 1, 1994. On September 29, 1994, the FERC approved a
Stipulation and Agreement (Agreement) filed by Natural. The Agreement places a
cap on the amount of GSR costs recoverable by Natural from Peoples Gas and North
Shore Gas. For Peoples Gas, that cap is approximately $103 million and for
North Shore Gas, that cap is approximately $25 million. However, subject to
these caps, the level of costs that Peoples Gas and North Shore Gas will incur
is dependent primarily upon the future market price of natural gas and pipeline
negotiations with producers. Peoples Gas and North Shore Gas are currently
recovering transition costs through the Gas Charge. At September 30, 1995,
Peoples Gas and North Shore Gas have made payments of $44.5 million and $10.9
million, and have accrued an additional $6.4 million and $1.6 million,
respectively, toward the caps.
The 636 Orders are not expected to have a material adverse effect on
financial position or results of operations of the Company or its subsidiaries.
(See Notes 1J and 2A.)
3. ENVIRONMENTAL MATTERS
3A Former Manufactured Gas Plant Operations
The Company's utility subsidiaries, their predecessors, and certain former
affiliates operated facilities in the past for manufacturing gas and storing
manufactured gas. In connection with manufacturing and storing gas, various by-
products and waste materials were produced, some of which might have been
disposed of rather than sold. Under certain laws and regulations relating to
the protection of the environment, the subsidiaries might be required to
undertake remedial action with respect to some of these materials, if found at
the sites. Two sites in Waukegan, Illinois, are the subjects of investigations
(discussed below) initiated by the United States Environmental Protection Agency
(EPA).
In May 1990, North Shore Gas was notified by the EPA that the EPA had
documented the release or threatened release of hazardous substances,
pollutants, and contaminants at a site located in Waukegan, Illinois, where
manufactured gas and coking operations were formerly conducted (Waukegan I
Site). Also, North Shore Gas, General Motors Corporation (GMC), and Outboard
Marine Corporation were notified
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<PAGE>
that each may be a potentially responsible party (PRP) under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
(CERCLA) with respect to the Waukegan I Site. A PRP is potentially liable for
the cost of any investigative and/or remedial work that the EPA determines is
necessary.
In September 1990, North Shore Gas entered into an Administrative Order on
Consent (AOC) with the EPA and the IEPA to implement and conduct a remedial
investigation/feasibility study (RI/FS) of the Waukegan I Site. The RI/FS is
comprised of an investigation to determine the nature and extent of
contamination at the site and a feasibility study to develop and evaluate
possible remedial actions. Other parties identified as PRPs did not enter into
the AOC. Under the terms of the AOC, North Shore Gas is responsible for the
cost of the RI/FS. North Shore Gas believes, however, that it will recover a
significant portion of the costs of the RI/FS from other entities. GMC has
agreed to share equally with North Shore Gas in funding of the RI/FS cost,
without prejudice to GMC's or North Shore Gas right to seek a lesser cost
responsibility at a later date.
In September 1991, North Shore Gas, the Elgin, Joliet and Eastern Railway
(EJ&E), and the North Shore Sanitary District (NSSD) each received an
administrative order (AO) issued by the EPA. The AO directed all three entities
to remove and dispose of all visible free tar in a pit located within a separate
site in Waukegan, Illinois (Waukegan II Site) and to conduct a study to
determine the extent of contamination of the tar from the pit to the surrounding
property. All of the work under the AO has been completed.
North Shore Gas has entered into a settlement agreement with NSSD with
respect to costs incurred under the AO. In December 1994, North Shore Gas filed
suit against EJ&E in the District Court for the Northern District of Illinois,
seeking recovery of response costs incurred by North Shore Gas at the Waukegan
II Site.
The current owner of a site in McCook, Illinois, near Chicago, has advised
Peoples Gas that the owner has found what appear to be wastes associated with
by-products of the gas manufacturing process under its property. The owner has
asserted that these wastes are the responsibility of Peoples Gas. Peoples Gas
is currently evaluating this claim.
Peoples Gas and North Shore Gas, in cooperation with the IEPA, are
conducting investigations of other sites (a total of 32) to determine whether
remedial action might be necessary. The investigations were initiated pursuant
to an informal request by the IEPA. To the best of the Company's knowledge,
similar informal requests have been made by the IEPA to other major Illinois gas
and electric utilities. Peoples Gas and North Shore Gas have engaged
environmental consulting firms to assist in the utilities' investigations. At
this time, except for the Waukegan I Site and the 110th Street Station site
(discussed below), it is not known what, if any, remedial action will be
necessary at the sites or, if necessary, what the cost of any such action would
be. As discussed below, Peoples Gas may conduct an RI/FS at the Division Street
site under the supervision of the IEPA. In addition, Peoples Gas is conducting
investigations under the supervision of the IEPA at the 110th Street Station and
Equitable Distribution Station sites.
In August 1988, the IEPA conducted an inspection at Peoples Gas' Division
Street property in Chicago. During the inspection, the IEPA and Peoples Gas
took several soil samples for laboratory analysis. The analysis of the samples
collected by Peoples Gas indicates the presence of certain substances within the
soil of the Division Street property that could be attributable to former
manufactured gas operations. Peoples Gas may conduct an RI/FS of the property
under the supervision of the IEPA.
Peoples Gas has been sued by a prior owner and has received demands from
the current owner of a site in Chicago formerly called Pitney Court Station.
The former owner alleges damages of over $1 million arising from alleged
contamination by Peoples Gas resulting from past gas manufacturing activities on
the
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<PAGE>
property. The current owner has demanded that Peoples Gas assume responsibility
for investigation and remediation of the alleged contamination. Peoples Gas is
currently evaluating these claims.
Peoples Gas has observed what appear to be gas purification wastes on a
site in Chicago, formerly called the 110th Street Station, and property
contiguous thereto. Peoples Gas has fenced the site and the contiguous property
and is conducting a study under the supervision of the IEPA to determine the
feasibility of a limited removal action.
The current owners at a site in Chicago, formerly called South Station,
have advised Peoples Gas that they have found what appear to be gas
manufacturing wastes underneath their property. The owners have demanded
monetary compensation from Peoples Gas because of the presence of such wastes.
Peoples Gas is currently evaluating this claim.
In 1994, Peoples Gas became aware of a planned residential development at a
site in Chicago, formerly called the Equitable Distribution Station. Peoples
Gas is conducting a preliminary investigation under the supervision of the IEPA
to determine whether gas manufacturing wastes are present at the site.
The utility subsidiaries are accruing and deferring the costs they incur in
connection with all of the sites, including related legal expenses, pending
recovery through rates or from insurance carriers or other entities. At
September 30, 1995, the total of the costs deferred by the subsidiaries, net of
recoveries and amounts billed to other entities, was $18.3 million. This amount
includes an estimate of the costs of completing the studies required by the EPA
at the Waukegan I Site and the Waukegan II Site and the investigations initiated
at the request of the IEPA at the other sites referred to above. The amount
also includes an estimate of the costs of remediation at the Waukegan I Site and
at the 110th Street Station site in Chicago, at the minimum amount of the
current estimated range of such costs. The costs of remediation at the other
sites cannot be determined until more is known about the nature and extent of
contamination and the remedial action, if any, to be required by the EPA or the
IEPA. While each subsidiary intends to seek contribution from other entities
for the costs incurred at the sites, the full extent of such contributions
cannot be determined at this time.
Peoples Gas and North Shore Gas have filed suit against a number of
insurance carriers for the recovery of environmental costs relating to the
utilities' former manufactured gas operations. The suit asks the court to
declare that the insurers are liable under policies in effect between 1938 and
1985 for costs incurred or to be incurred by the utilities in connection with
five former manufactured gas sites in Chicago and Waukegan. The utilities are
also asking the court to award damages stemming from the insurers' breach of
their contractual obligation to defend and indemnify the utilities against these
costs. At this time, management cannot determine the timing and extent of the
subsidiaries' recovery of costs from their insurance carriers. Accordingly, the
costs deferred at September 30, 1995 have not been reduced to reflect recoveries
from insurance carriers.
Costs incurred by Peoples Gas or North Shore Gas for environmental
activities relating to former manufactured gas operations will be recovered from
insurance carriers or other entities or through rates for utility service.
Accordingly, management believes that the costs incurred by the subsidiaries in
connection with the sites will not have a material adverse effect on financial
position or results of operations of the subsidiaries. Peoples Gas and North
Shore Gas are recovering the costs of environmental activities relating to the
utilities' former manufactured gas operations under rate mechanisms approved by
the Commission. At September 30, 1995, the subsidiaries had recovered $4.3
million of such costs through rates. (See Note 2A for a discussion of
proceedings regarding the recovery of such costs through utility rates.)
-34-
<PAGE>
3B Former Mineral Processing Site in Denver, Colorado
In February 1994, North Shore Gas received a demand from the S.W. Shattuck
Chemical Company, Inc. (Shattuck), a responsible party under CERCLA, for
reimbursement, indemnification and contribution for response costs incurred at a
former mineral processing site in Denver, Colorado. Shattuck is a wholly owned
subsidiary of Salomon, Inc. (Salomon). The demand alleges that North Shore Gas
is a successor-in-interest to certain companies that were allegedly responsible
during the period 1934-1941 for the disposal of mineral processing wastes
containing radium and other hazardous substances at the site. The cost of the
remedy at the site has been estimated by Shattuck to be approximately $31
million. Salomon has provided financial assurance for the performance of the
remediation at the site.
North Shore Gas does not believe that it has liability for the response
costs, but cannot determine the matter with certainty. At this time, North
Shore Gas cannot reasonably estimate what range of loss, if any, may occur. In
the event that North Shore Gas incurred liability, it would pursue reimbursement
from insurance carriers, other responsible parties, if any, and through its
rates for utility service.
In November 1994, North Shore Gas filed a declaratory judgment action
against Salomon in the District Court for the Northern District of Illinois.
The suit asks the court to declare that North Shore Gas is not liable for
response costs incurred or to be incurred at the Denver site. Salomon has filed
a counterclaim for costs incurred and to be incurred by Salomon and Shattuck
with respect to the site.
3C Gasoline Release in Wheeling, Illinois
In June 1995, North Shore Gas received a letter from the IEPA informing
North Shore Gas that it was not in compliance with certain provisions of the
Illinois Environmental Protection Act which prohibit water pollution within the
State of Illinois. The letter states that the alleged violations are the result
of a gasoline release that occurred in Wheeling, Illinois in June 1992 when a
contractor who was installing a pipeline for North Shore Gas accidentally struck
a gasoline pipeline owned by West Shore Pipeline Company. The letter further
advises that the matter has been referred to the Office of the Illinois Attorney
General for the preparation of a formal enforcement complaint. North Shore Gas
has been informed that four other entities have received a similar letter.
North Shore Gas is currently evaluating this matter.
4. GAS OVER-PRESSURE CONDITION
On January 17, 1992, an over-pressure condition occurred in the gas mains
of Peoples Gas serving an approximately one-square-mile area of the Near
Northwest Side of the City of Chicago. The over-pressure condition caused a
major explosion and numerous fires. Peoples Gas is aware of four deaths and 14
personal injuries allegedly resulting from the explosion and fires. Peoples Gas
also has been informed that damage occurred in an estimated 28 buildings. There
was also damage, such as broken windows, wall cracks, and water damage, to
additional buildings.
A number of lawsuits have been filed against Peoples Gas as a result of the
over-pressure condition. Some lawsuits also have named the Company as a
defendant. The Company is not a proper party to these suits, and management
expects that the Company will be dismissed from the litigation. The lawsuits
include wrongful-death claims and several class actions that seek to certify as
a class those persons who suffered bodily harm and/or property damage. All of
the suits allege negligence and seek compensatory damages. Some of the lawsuits
also seek punitive damages. These suits have not quantified the alleged damages
except for certain amounts that are not material.
-35-
<PAGE>
In January 1993, the National Transportation Safety Board (NTSB) completed
its report regarding its investigation of the over-pressure incident that
occurred on January 17, 1992. In its report, the NTSB stated that "the probable
cause of the over-pressure accident and the resulting losses was the failure of
Peoples Gas Light Coke Company to adequately train its gas operations section
employees in recognizing and correctly responding to abnormal situations, which
consequently led to the failure of the gas operations section crew to properly
monitor and control the pressure of the gas being supplied to the low-pressure
gas system during a routine inspection."
In June 1993, the Staff of the Illinois Commerce Commission (Commission
Staff) released its report concerning the over-pressure incident. In its
report, the Commission Staff concluded that employee error was the probable
cause of the over-pressurization. The report was critical of Peoples Gas'
training of its personnel in its gas operations section and of some of Peoples
Gas' practices at the time of the incident.
The Company and Peoples Gas strongly disagree with the criticisms by the
NTSB and the Commission Staff of the training given by Peoples Gas to personnel
in its gas operations section. The Company and Peoples Gas also disagree with
some of the findings and conclusions of the Commission Staff, including several
of the Commission Staff's findings and its theory, analysis, and conclusions
pertaining to the probable cause of the over-pressurization.
The Company and Peoples Gas carry substantial insurance coverage. If
liability were found on the part of the Company or Peoples Gas, management
believes that any costs incurred for damages will be adequately covered by
insurance. However, Peoples Gas' primary insurance carrier has asserted that
under Illinois law, liability for punitive damages is not insurable. Peoples
Gas has advised the insurance carrier that it disagrees and intends to assert
all of its rights against the carrier including its right to obtain recovery for
punitive damages, if any. Management is not aware of any conduct on its part or
by employees of Peoples Gas or of the Company that would give rise to punitive
damages under Illinois law. Accordingly, management believes that the incident
will not have a material adverse effect on financial position or results of
operations of the Company or Peoples Gas.
5. COVENANTS REGARDING RETAINED EARNINGS
North Shore Gas' indenture relating to its first mortgage bonds contains
provisions and covenants restricting the payment of cash dividends and the
purchase or redemption of capital stock. At September 30, 1995, such
restrictions amounted to $11.6 million out of North Shore Gas' total retained
earnings of $62 million.
6. DISTRICT ENERGY
Peoples District Energy is a 50 per cent participant in a partnership,
Trigen-Peoples District Energy Company, that provides heating and cooling
services to the McCormick Place exposition and convention center in Chicago,
Illinois. The partnership also intends to offer district energy services to
other large buildings in Chicago. The services will ultimately be supplied from
one or more central plants, a concept known as district energy. The other
partner, Trigen-Chicago Energy Corporation (Trigen-Chicago), is a subsidiary of
Trigen. Neither the partnership nor its partners are regulated as a public
utility.
In December 1992, the partnership entered into a 28-year contract with the
Metropolitan Pier and Exposition Authority (MPEA) to construct and operate a
plant that will provide steam and chilled water to McCormick Place for heating
and cooling purposes (MPEA Agreement). In November 1993, the
-36-
<PAGE>
partnership assumed operation of the current space-conditioning system and began
providing service to the two existing halls. The partnership also will provide
heating and cooling to a planned exhibition hall that is scheduled to be in
operation early in 1997. The partnership is obligated to provide services to
McCormick Place for the term of the MPEA Agreement at or below the cost (as
determined by a contractual formula) that the MPEA would incur to produce
heating and cooling for itself. The MPEA Agreement also obligates the
partnership to complete and pay for construction of the plant by certain dates
specified in the contract. To secure its obligations during the service period
under the MPEA Agreement, the partnership is obligated to provide, maintain, and
reinstate a letter of credit upon which the MPEA can draw to pay its costs,
expenses, and damages, up to $4 million per incident, principally in the event
of the partnership's failure to cure timely an interruption of service.
The Company and Trigen have provided two joint and several guarantees to
the MPEA of the partnership's performance of its obligations under the MPEA
Agreement. One of the guarantees covers all obligations of the partnership
relating to construction of the project (Construction Obligations), and is
limited in the aggregate to $15 million, except for the guarantors' funding
obligations described above and costs to the extent incurred by the MPEA in
connection with enforcement of obligations of the partnership or the guarantors.
The second guarantee covers all obligations of the partnership other than the
Construction Obligations, including liabilities arising from an interruption of
service to McCormick Place, insolvency of the partnership, or other partnership
default. This second guarantee is limited in the aggregate to $11 million,
except for an additional $4 million to $8 million in the event of insolvency of
the partnership or the installation (pursuant to enforcement of lender or MPEA
remedies) of any other operator of the district energy plant in lieu of the
partnership, and except for the partnerships obligations relating to the letter
of credit in favor of the MPEA described above and costs to the extent incurred
by the MPEA in connection with the enforcement of obligations of the partnership
or the guarantors.
The district energy plant is estimated to cost approximately $38 million.
The MPEA has effectively funded $8 million of the construction costs, and the
partnership will fund the balance. In August 1995, the partnership obtained a
$28 million construction and term loan to finance construction of a major
portion of the project. Upon completion of construction of the project, the
construction loans will be converted to a term loan with a 20-year maturity. In
connection with the financing, the Company pledged its shares of common stock of
Peoples District Energy to the lender as security for the loan obligations.
Additionally, the Company, Peoples District Energy, Trigen, Trigen-Chicago and
the partnership executed a Sponsors Support and Equity Contribution Agreement
(Sponsors Support Agreement).
Under the Sponsors Support Agreement, the Company and Trigen have certain
contractual obligations to the lender that could require payment by each of the
Company and Trigen of 50 per cent of the outstanding loan obligations upon the
occurrence of certain events relating to material destruction of the project,
condemnation of the project, purchase of the project by the MPEA pursuant to
provisions of the MPEA Agreement and default by the partnership, the Company or
Trigen of certain of its obligations to the MPEA.
7. LONG-TERM LEASE
In October 1993, Peoples Gas entered into a new 15-year lease to relocate
its headquarters office. The relocation was substantially completed in February
1995 prior to the expiration of the old lease. Peoples Gas is accounting for
the new lease as an operating lease in accordance with SFAS No. 13, "Accounting
for Leases."
-37-
<PAGE>
The rental obligation consists of a base rent of $2.3 million plus
operating expenses and taxes. The base rent escalates by 2 per cent each year
through the 10th year. Base rent in the 11th year is approximately $3.6 million
with annual increases of 2 per cent each year through the 15th year. Rental
expense will be comparable with the former lease at Peoples Gas' previous
headquarters location.
Rental expenses under the lease arrangements were $6.4 million in fiscal
1995 and $6.1 million for each of the fiscal years 1994 and 1993.
8. RETIREMENT AND POSTEMPLOYMENT BENEFITS
8A Pension Benefits
The Company and its subsidiaries participate in two defined benefit pension
plans covering substantially all employees. These plans provide pension
benefits that generally are based on an employee's length of service,
compensation during the five years preceding retirement, and social security
benefits. Peoples Gas and North Shore Gas make annual contributions to the
plans based upon actuarial determinations and in consideration of tax
regulations and funding requirements under federal law.
The Company also has a non-qualified pension plan that provides certain
employees with pension benefits in excess of qualified plan limits imposed by
federal tax law.
Net pension cost for all plans for fiscal 1995, 1994, and 1993 included the
following components:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
1995 1994 1993
- --------------------------------------------------------------------------------
(Millions)
<S> <C> <C> <C>
Service cost - benefits earned during year $14.4 $15.8 $17.1
Interest cost on projected benefit obligations 29.9 30.0 30.4
Actual return on plan assets (gain) loss (85.0) (15.0) (56.8)
Net amortization and deferral 45.5 (25.5) 17.0
- --------------------------------------------------------------------------------
Net pension cost $ 4.8 $ 5.3 $ 7.7
- --------------------------------------------------------------------------------
</TABLE>
The calculation of pension cost assumed a long-term rate of return on
assets of 7.5 per cent for 1993 through 1995.
-38-
<PAGE>
The following table shows the estimated funded status of the Company's
pension plans at September 30, 1995 and 1994:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
1995 1994
- --------------------------------------------------------------------------------
(Millions)
<S> <C> <C>
Plan assets at market value $578.0 $531.1
- --------------------------------------------------------------------------------
Actuarial present value of plan benefits:
Vested 307.2 334.2
Non-vested 45.7 39.1
- --------------------------------------------------------------------------------
Accumulated benefit obligation 352.9 373.3
Effect of projected future compensation increases 100.0 101.0
- --------------------------------------------------------------------------------
Projected benefit obligation 452.9 474.3
- --------------------------------------------------------------------------------
Excess of plan assets over projected benefit obligation 125.1 56.8
Less:
Unrecognized transition asset 27.2 29.9
Unrecognized prior service cost (5.1) (5.5)
Unrecognized net gain 105.8 35.4
- --------------------------------------------------------------------------------
Accrued pension liability $ (2.8) $ (3.0)
- --------------------------------------------------------------------------------
</TABLE>
The projected benefit obligation, which is based on an October 1
measurement date, was determined using a discount rate of 7 per cent for 1995
and 6.5 per cent for 1994, and assumed future compensation increases of 5 per
cent for each year. Plan assets consist primarily of marketable equity and
fixed-income securities.
8B Other Postretirement Benefits
The Company and its subsidiaries also provide certain health care and life
insurance benefits for retired employees. Substantially all employees may
become eligible for such benefit coverage if they reach retirement age while
working for the companies. The plans are funded based upon actuarial
determinations and in consideration of tax regulations and funding requirements
under federal law.
The Company adopted SFAS No. 106 effective October 1, 1993. SFAS No. 106
requires the accrual of the expected costs of such benefits during the
employees' years of service. Due to regulatory treatment, the adoption of
SFAS No. 106 did not have a material effect on financial position or results of
operations.
Net postretirement benefit cost for all plans for fiscal 1995 and 1994
included the following components:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
1995 1994
- --------------------------------------------------------------------------------
(Millions)
<S> <C> <C>
Service cost - benefits earned during year $ 2.7 $ 3.1
Interest cost on projected benefit obligations 7.9 7.7
Actual return on plan assets (gain) loss (3.7) (0.3)
Amortization of transition obligation 4.9 4.9
Net amortization and deferral 2.5 (0.2)
- --------------------------------------------------------------------------------
Net postretirement benefit cost $14.3 $15.2
- --------------------------------------------------------------------------------
</TABLE>
-39-
<PAGE>
The calculation of postretirement benefit cost assumed a long-term rate of
return on assets of 7.5 per cent for 1994 and 1995.
The Company recognized total postretirement costs of $14.3 million during
fiscal 1995. Of this amount, $6.4 million was funded through trust funds for
future benefit payments. Such costs during fiscal year 1994 were $15.2 million,
of which $8.5 million was funded.
The following table sets forth the estimated funded status for the
postretirement health care and life insurance plans at September 30, 1995 and
1994:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
1995 1994
- --------------------------------------------------------------------------------
(Millions)
<S> <C> <C>
Plan assets at market value $ 32.6 $ 21.2
- --------------------------------------------------------------------------------
Accumulated postretirement benefit obligation (APBO):
Retirees 71.6 61.0
Fully eligible active plan participants 14.5 17.1
Other active plan participants 26.9 29.0
- --------------------------------------------------------------------------------
Total APBO 113.0 107.1
- --------------------------------------------------------------------------------
Excess (deficiency) of plan assets over the APBO (80.4) (85.9)
Less:
Unrecognized transition obligation (88.8) (93.7)
Unrecognized net gain 7.6 7.5
- --------------------------------------------------------------------------------
Accrued postretirement benefit asset $ 0.8 $ 0.3
- --------------------------------------------------------------------------------
</TABLE>
The total APBO, which is based on an October 1 measurement date, was
determined using a discount rate of 6.5 per cent for 1995 and 7.75 per cent for
1994, and assumed future compensation increases of 5 per cent for each year.
The unfunded obligation is being amortized over 20 years. Plan assets consist
primarily of marketable equity and fixed-income securities.
For measurement purposes, a health care cost trend rate of 9.6 per cent was
assumed for fiscal 1996, and that rate thereafter will decline to 3.75 per cent
in 2003 and subsequent years. The health care cost trend rate assumption has a
significant effect on the amounts reported. Increasing the assumed health care
cost trend rate by one percentage point for each future year would have
increased the APBO at September 30, 1995, by $7.6 million and the aggregate of
service and interest cost components of the net periodic postretirement benefit
cost by $1 million annually.
8C Postemployment Benefits
In November 1992, the Financial Accounting Standards Board issued SFAS No.
112. This statement requires the accrual of certain benefits provided to former
or inactive employees after employment but before retirement. The Company
adopted SFAS No. 112 effective October 1, 1994. Implementation of this
statement did not have a material effect on financial position or results of
operations.
-40-
<PAGE>
<TABLE>
<CAPTION>
9. TAX MATTERS
9A Provision for Income Taxes
For fiscal years ended September 30, 1995 1994 1993
- -------------------------------------------------------------------------------------------------------
(Thousands)
<S> <C> <C> <C>
Current:
Federal $18,328 $38,438 $24,888
State 3,323 8,419 4,792
- -------------------------------------------------------------------------------------------------------
Total current income taxes 21,651 46,857 29,680
- -------------------------------------------------------------------------------------------------------
Deferred:
Federal 9,847 (8,582) 6,968
State 2,917 (987) 2,478
- -------------------------------------------------------------------------------------------------------
Total deferred income taxes 12,764 (9,569) 9,446
- -------------------------------------------------------------------------------------------------------
Investment tax credits - net:
Federal (1,975) (2,017) (2,044)
State 213 252 536
- -------------------------------------------------------------------------------------------------------
Total investment tax credits - net (1,762) (1,765) (1,508)
- -------------------------------------------------------------------------------------------------------
Total provision for income taxes 32,653 35,523 37,618
Less - Included in other income or operation expense 97 3,470 52
- -------------------------------------------------------------------------------------------------------
Total provision for operating income taxes $32,556 $32,053 $37,566
- -------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
9B Deferred Income Taxes
Set forth in the table below are the temporary differences which gave rise to the net deferred income tax liabilities
(see Note 1I):
- -------------------------------------------------------------------------------------------------------
At September 30, 1995 1994
- -------------------------------------------------------------------------------------------------------
(Thousands)
<S> <C> <C>
Deferred tax liabilities:
Property - accelerated depreciation and
other property related items $230,542 $223,865
Other 8,745 4,097
- -------------------------------------------------------------------------------------------------------
Total deferred income tax liabilities 239,287 227,962
- -------------------------------------------------------------------------------------------------------
Deferred tax assets:
Unamortized investment tax credits (15,124) (15,820)
Uncollectible accounts (7,706) (9,635)
Other (8,033) (12,569)
- -------------------------------------------------------------------------------------------------------
Total deferred income tax assets (30,863) (38,024)
- -------------------------------------------------------------------------------------------------------
Net deferred income tax liabilities $208,424 $189,938
- -------------------------------------------------------------------------------------------------------
</TABLE>
-41-
<PAGE>
9C Tax Rate Reconciliation
The following is a reconciliation between the computed federal income tax
expense (tax rate of 35 per cent for 1995 and 1994, and 34.75 per cent for 1993,
times pre-tax book income) and the total provision for federal income tax
expenses:
<TABLE>
<CAPTION>
For fiscal years ended September 30, 1995 1994 1993
- --------------------------------------------------------------------------------------------------------------------------------
Per Cent Per Cent Per Cent
of of of
Amount Pre-tax Amount Pre-tax Amount Pre-tax
(000's) Income (000's) Income (000's) Income
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Computed federal income
tax expense $30,924 35.00 $35,783 35.00 $36,107 34.75
Amortization of investment
tax credits (1,975) (2.24) (2,017) (1.97) (2,044) (1.97)
Amortization of deferred taxes (932) (1.05) (1,951) (1.91) (2,027) (1.95)
Nontaxable-tax settlement principal (1,965) (2.22) (1,965) (1.92) 22 0.02
Other, net 148 0.17 (2,011) (1.97) (2,246) (2.16)
- --------------------------------------------------------------------------------------------------------------------------------
Total provision for federal
income taxes $26,200 29.66 $27,839 27.23 $29,812 28.69
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
9D Income Tax Settlement
On September 30, 1993, the Company received notification from the IRS that
settlement of past income tax returns had been reached for fiscal years 1978
through 1990. The IRS settlement resulted in payments of principal and interest
to the Company in 1994 in total amount of approximately $28 million, or $21.6
million after income taxes. Both Peoples Gas and North Shore Gas received
regulatory authorization to defer the recognition of the settlement amount in
income for fiscal year 1993, and to recognize its portion of the settlement
amount in income for fiscal years 1994 and 1995. Each utility represented to
the Commission that, having received this accounting authorization, it would not
file a request for an increase in base rates before December 1994. The
regulatory treatment of the IRS settlement having been resolved in November
1993, Peoples Gas and North Shore Gas together included $14 million, or $10.8
million after income taxes, in income in 1994. The amount after income taxes
was included in Other Income - Miscellaneous. At September 30, 1994,
approximately $14 million was included in Deferred Credits and Other Liabilities
- - Other.
As a result of the Commission's accounting authorization, the fiscal year
1995 portion of the settlement amount for Peoples Gas and North Shore Gas was
amortized (credited) to operation expense. The effect was to offset increases
in costs that the utilities would incur during the year. In fiscal 1995, the
utilities together amortized approximately $14 million, or $10.8 million after
income taxes.
10. ASSETS SUBJECT TO LIEN
The Indenture of Mortgage, dated January 2, 1926, as supplemented, securing
the first and refunding mortgage bonds issued by Peoples Gas, constitutes a
direct, first-mortgage lien on substantially all property owned by Peoples Gas.
The Indenture of Mortgage, dated April 1, 1955, as supplemented, securing the
first mortgage bonds issued by North Shore Gas, constitutes a direct, first-
mortgage lien on substantially all property owned by North Shore Gas.
-42-
<PAGE>
<TABLE>
<CAPTION>
11. OTHER INCOME - MISCELLANEOUS
For fiscal years ended September 30, 1995 1994 1993
- ---------------------------------------------------------------------------------------------------------------------------
(Thousands)
<S> <C> <C> <C>
Amortization of net gain on sale of Peoples Gas Building $576 $ 1,151 $1,151
Interest on amounts recoverable from customers 119 2,495 1,632
Income tax settlement (see Note 9D) -- 14,164 --
Income taxes on income tax settlement (see Note 9D) -- (3,372) --
Amortization of gain on reacquired bonds 362 380 380
Other 319 (190) 239
- ---------------------------------------------------------------------------------------------------------------------------
Total other income - miscellaneous $1,376 $14,628 $3,402
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
12. CAPITAL COMMITMENTS
Total contract and purchase order commitments of the Company and its
subsidiaries at September 30, 1995, amounted to approximately $5.2 million.
<TABLE>
<CAPTION>
13. SHORT-TERM BORROWINGS AND CREDIT LINES
At September 30, 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------
(Thousands)
<S> <C> <C>
Bank Loans
Peoples Gas
8.75% due November 6, 1995 $ 900 $ --
7.75% due December 22, 1994 -- 900
- ---------------------------------------------------------------------------------------------------------------------------
Available lines of credit
Unused bank lines $130,150 $140,150
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
Short-term cash needs of Peoples Gas and North Shore Gas are met through
intercompany loans from the Company, bank loans, and/or the issuance of
commercial paper. The outstanding total amount of bank loans and commercial
paper issuances cannot at any time exceed total bank credit then in effect.
On December 16, 1994, a line of credit totaling $10 million, which had been
obtained by the Company to cover its anticipated short-term credit requirements,
was allowed to expire because it was no longer needed. At September 30, 1995
and 1994, the utility subsidiaries had combined lines of credit totaling $131.1
million. Of this amount, North Shore Gas can borrow up to $30 million.
Agreements covering $93.7 million of the total will expire on June 26, 1996; the
agreement covering the remaining $37.4 million will expire on January 31, 1997.
Such lines of credit cover projected short-term credit needs of the subsidiaries
and support the long-term debt treatment of Peoples Gas adjustable-rate mortgage
bonds. (See Note 14B.) Payment for the lines of credit is by fee.
-43-
<PAGE>
14. LONG-TERM DEBT
14A Issuance of Bonds
In March 1993, North Shore Gas filed a shelf registration with the SEC for
the issuance of $40 million aggregate principal amount of first mortgage bonds.
In May 1993, North Shore Gas issued a portion of those first mortgage bonds in
an aggregate principal amount of $15 million at 6.37 per cent due May 1, 2003.
Proceeds of the offering were used to refund approximately $11 million aggregate
principal amount of North Shore Gas previously issued first mortgage bonds and
for general corporate purposes. North Shore Gas may issue all or a portion of
the remaining bonds early in fiscal 1997. Proceeds of any future offering will
be used for general corporate purposes.
On June 29, 1995, the City of Chicago issued $50 million aggregate
principal amount of 6.10 per cent gas supply refunding revenue bonds, 1995
Series A, which were collateralized by an equal amount of Peoples Gas' 30-year
first mortgage bonds. On August 1, 1995, the proceeds were used to redeem
$50 million aggregate principal amount of previously issued gas supply revenue
bonds. Other funds provided by Peoples Gas were used for the payment of
expenses of issuance, including the underwriters' fee.
14B Interest-Rate Adjustments
The rate of interest on the City of Joliet 1984 Series C Bonds, which are
secured by Peoples Gas' Adjustable-Rate First Mortgage Bonds, Series W, is
subject to adjustment annually on October 1. Owners of the Series C Bonds have
the right to tender such bonds at par during a limited period prior to that
date. Peoples Gas is obligated to purchase any such bonds tendered if they
cannot be remarketed. All Series C Bonds that were tendered prior to October 1,
1995, have been remarketed. The interest rate on such bonds is 4 per cent for
the period October 1, 1995, through September 30, 1996.
The rate of interest on the City of Chicago 1993 Series B Bonds, which are
secured by Peoples Gas' Adjustable-Rate First Mortgage Bonds, Series EE, is
subject to adjustment annually on December 1. Owners of the Series B Bonds have
the right to tender such bonds at par during a limited period prior to that
date. Peoples Gas is obligated to purchase any such bonds tendered if they
cannot be remarketed. The interest rate on such bonds is 4.95 per cent for the
period December 1, 1994, through November 30, 1995.
Peoples Gas classifies these adjustable-rate bonds as long-term liabilities
since it would refinance them on a long-term basis if they could not be
remarketed. In order to ensure its ability to do so, Peoples Gas established a
$37.4 million three year line of credit with The Northern Trust Company. (See
Note 13.)
14C Sinking Fund Requirements and Maturities of Subsidiaries
At September 30, 1995, long-term debt sinking fund requirements and
maturities for the next five years are:
<TABLE>
<CAPTION>
Peoples North
Fiscal Year Gas Shore Gas Consolidated
- --------------------------------------------------------------------------------
(Thousands)
<S> <C> <C> <C>
1996 $ -- $ 4,000 $ 4,000
1997 -- 4,000 4,000
1998 -- 4,000 4,000
1999 86,750 -- 86,750
2000 10,400 -- 10,400
</TABLE>
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<PAGE>
14D Fair Value of Financial Instruments
At September 30, 1995, the carrying amount of the Company's long-term debt
of $621.9 million had an estimated fair value of $660.4 million. At September
30, 1994, the carrying amount of the Company's long-term debt of $626.1 million
had an estimated fair value of $662.7 million. The estimated fair value of the
Company's long-term debt is based on quoted market prices or yields for issues
with similar terms and remaining maturities. Since Peoples Gas and North Shore
Gas are subject to regulation, any gains or losses related to the difference
between the carrying amount and the fair value of financial instruments would
not be realized by the Company's shareholders. The carrying amount of all other
financial instruments approximates fair value.
15. PREFERRED STOCK
The Company has five million shares of Preferred Stock, no par value,
authorized for issuance, of which none was issued and outstanding at September
30, 1995.
16. COMMON STOCK
<TABLE>
<CAPTION>
For fiscal years ended September 30, 1995 1994 1993
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Shares outstanding - beginning of year 34,868,069 34,822,842 34,773,944
Shares issued:
Employee Stock Purchase Plan 32,221 35,570 28,848
Long-Term Incentive Compensation Plan 16,650 13,345 81,425
Other Deferred Compensation Plans 1,367 1,278 1,206
Shares reacquired (4,881) (4,966) (62,581)
- -------------------------------------------------------------------------------------------------------
Shares outstanding - end of year 34,913,426 34,868,069 34,822,842
- -------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Reserved At September 30, 1995 1994 1993
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Dividend Reinvestment and Stock Purchase Plan 1,036,891 1,036,891 1,036,891
Employee Stock Purchase Plan 1,019,513 1,051,734 1,087,304
Long-Term Incentive Compensation Plan 852,630 469,280 482,625
- -------------------------------------------------------------------------------------------------------
Total shares reserved 2,909,034 2,557,905 2,606,820
- -------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Stock
Non-Qualified Appreciation
Long-Term Incentive Compensation Plan Price Range Stock Options Rights (SARs)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Outstanding at September 30, 1992 $23.69-25.69 77,300 77,300
- -------------------------------------------------------------------------------------------------------
Granted $ 30.38 56,300 56,300
Exercised 23.69-25.69 (69,200) (69,200)
- -------------------------------------------------------------------------------------------------------
Outstanding at September 30, 1993 $25.69-30.38 64,400 64,400
- -------------------------------------------------------------------------------------------------------
Granted $ 30.88 52,700 52,700
Exercised 30.38 (1,200) (1,200)
- -------------------------------------------------------------------------------------------------------
Outstanding at September 30, 1994 $25.69-30.88 115,900 115,900
- -------------------------------------------------------------------------------------------------------
Granted $ 25.69 71,500 71,500
Exercised -- -- --
- -------------------------------------------------------------------------------------------------------
Outstanding at September 30, 1995 $25.69-30.88 187,400 187,400
- -------------------------------------------------------------------------------------------------------
</TABLE>
-45-
<PAGE>
Restricted stock awarded to officers of the Company during the last three
fiscal years are as follows: 1995, 16,650 shares; 1994, 12,625 shares; and 1993,
12,225 shares. At September 30, 1995, there were 665,230 shares available for
future grant under options or restricted stock awards. At September 30, 1995,
there were 748,950 SARs available for future grant.
17. QUARTERLY FINANCIAL DATA (UNAUDITED)
The fluctuation in quarterly results is primarily due to the seasonal
nature of the gas distribution business. Results for the first quarter of
fiscal 1994 include the recording of one-half of an IRS settlement, in income,
increasing net income by $10.7 million or 31 cents per share. The fiscal 1995
portion of the settlement was amortized to operation expense over the entire
year. (See Note 9D.)
<TABLE>
<CAPTION>
Earnings
Operating Operating Per
Fiscal Quarters Revenues Income Net Income Share
- ----------------------------------------------------------------------------------------------
(Thousands, except per-share amounts)
<S> <C> <C> <C> <C>
1995
Fourth $114,705 $(3,668) $(13,355) $(0.38)
Third 187,187 14,937 4,563 0.13
Second 424,386 57,265 45,819 1.31
First 307,123 36,221 25,127 0.72
1994
Fourth $118,822 $(6,776) $(15,597) $(0.45)
Third 206,791 11,560 2,604 0.07
Second 574,593 58,434 48,404 1.39
First 379,282 38,598 38,988 1.12
</TABLE>
Quarterly earnings-per-share amounts are based on the weighted average
common shares outstanding for each quarter and, therefore, might not equal the
amount computed for the total year.
18. EVENTS (UNAUDITED) SUBSEQUENT TO THE AUDITORS REPORT DATED NOVEMBER 1, 1995
RATES AND REGULATION
Utility Rate Proceedings
PEOPLES GAS' RATE ORDER. On November 8, 1995, subsequent to the date of
the auditors' report, the Commission issued an order approving changes in
rates of Peoples Gas that are designed to increase annual revenues by
approximately $30.8 million, exclusive of additional charges for revenue taxes.
Peoples Gas was allowed a rate of return on original-cost rate base of 9.19 per
cent, which reflects an 11.10 per cent cost of common equity. The new rates
were implemented on November 14, 1995. Various parties, including Peoples
Gas, filed petitions for rehearing of the Commission's order. On December
20, 1995, the Commission denied those petitions. The parties may appeal the
Commission's order to the Illinois Appellate Court. (See Note 2A.)
NORTH SHORE GAS' RATE ORDER. On November 8, 1995, subsequent to the date
of the auditors' report, the Commission issued an order approving changes in
rates of North Shore Gas that are designed to increase annual revenues by
approximately $5.6 million, exclusive of additional charges for revenue taxes.
North Shore Gas was allowed a rate of return on original-cost rate base of 9.75
per cent, which reflects an 11.30 per cent cost of common equity. The new rates
were implemented on November 14, 1995. Various parties filed petitions for
rehearing of the Commission's order. On December 20, 1995, the Commission
denied those petitions. The parties may appeal the Commission's order to the
Illinois Appellate Court. (See Note 2A.)
-46-
<PAGE>
ENVIRONMENTAL COST RECOVERY. On November 21, 1995, subsequent to the date
of the auditors' report, the Commission entered its order on remand in its
consolidated proceedings regarding the appropriate ratemaking treatment of
environmental costs incurred by Illinois utilities, including Peoples Gas and
North Shore Gas, in connection with the investigation and treatment of residues
associated with past manufactured gas operations. Consistent with the Illinois
Supreme Court's April 20, 1995 decision, the Commission, in its order on remand,
reversed its earlier order to allow utilities to recover carrying charges on
such environmental costs incurred on and after April 20, 1995, the date of the
Supreme Court's decision. (See Note 2A.)
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
Information relating to the directors of the Company is set forth under the
caption "Information Concerning Nominees for Election as Directors" of the
Company's Proxy Statement, to be filed with the SEC on or about December 28,
1995, and to be distributed in connection with the Company's Annual Meeting of
Shareholders to be held on February 23, 1996. Such information is incorporated
herein by reference.
Information relating to the executive officers of the Company is set forth
in Part I of this report under the caption "Executive Officers of the Company."
ITEM 11. EXECUTIVE COMPENSATION
Information relating to executive compensation is set forth under the
captions "Executive Compensation" and "Report on Executive Compensation" of the
Company's Proxy Statement, to be filed with the SEC on or about December 28,
1995, and to be distributed in connection with the Company's Annual Meeting of
Shareholders to be held on February 23, 1996. Such information is incorporated
herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information relating to this item is set forth under the caption "Share
Ownership of Director Nominees, and Executive Officers" of the Company's Proxy
Statement, to be filed with the SEC on or about December 28, 1995, and to be
distributed in connection with the Company's Annual Meeting of Shareholders to
be held on February 23, 1996. Such information is incorporated herein by
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
-47-
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. Financial Statements: PAGE
See Part II, Item 8. 21
2. Financial Statement Schedules:
Schedule
Number
--------
VIII Valuation and Qualifying Accounts 49
3. Exhibits:
See Exhibit Index on page 51.
(b) Reports on Form 8-K filed during the final quarter of fiscal year 1995:
None.
-48-
<PAGE>
SCHEDULE VIII
<TABLE>
PEOPLES ENERGY CORPORATION AND SUBSIDIARY COMPANIES
VALUATION AND QUALIFYING ACCOUNTS
(Thousands)
<CAPTION>
Column A Column B Column C Column D Column E
- ------------------------------------------------- ---------- --------- --------------------- --------
Additions Deductions
--------- ---------------------
Charged Charges for the
Balance to costs purpose for which the Balance
at beginning and reserves or deferred at end of
Description of period expenses credits were created period
- ------------------------------------------------- ------------ --------- ---------------------- ---------
<S> <C> <C> <C> <C>
FISCAL YEAR ENDED SEPTEMBER 30, 1995
RESERVES (deducted from assets in balance sheet):
Uncollectible items $24,289 $22,740 $28,016 $19,013
FISCAL YEAR ENDED SEPTEMBER 30, 1994
RESERVES (deducted from assets in balance sheet):
Uncollectible items $19,789 $32,016 $27,516 $24,289
FISCAL YEAR ENDED SEPTEMBER 30, 1993
RESERVES (deducted from assets in balance sheet):
Uncollectible items $16,755 $22,490 $19,456 $19,789
</TABLE>
-49-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
PEOPLES ENERGY CORPORATION
Date: December 21, 1995 By: /s/ RICHARD E. TERRY
----------------- ---------------------------------
Richard E. Terry
Chairman of the Board and Chief
Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the registrant and in the capacities indicated on December 21, 1995.
/s/ RICHARD E. TERRY Chairman of the Board and Chief Executive
- ---------------------- Officer and Director
Richard E. Terry (Principal Executive Officer)
/s/ KENNETH S. BALASKOVITS Vice President and Controller
- ---------------------------- (Principal Financial and Accounting Officer)
Kenneth S. Balaskovits
/s/ J. BRUCE HASCH Director
- --------------------
J. Bruce Hasch
/s/ MICHAEL S. REEVES Director
- -----------------------
Michael S. Reeves
/s/ PASTORA SAN JUAN CAFFERTY Director
- -------------------------------
Pastora San Juan Cafferty
/s/ FREDERICK C. LANGENBERG Director
- -----------------------------
Frederick C. Langenberg
/s/ H. J. LIVINGSTON, JR. Director
- ---------------------------
H. J. Livingston, Jr.
/s/ WILLIAM G. MITCHELL Director
- -------------------------
William G. Mitchell
/s/ EARL L. NEAL Director
- ------------------
Earl L. Neal
/s/ RICHARD P. TOFT Director
- ---------------------
Richard P. Toft
/s/ ARTHUR R. VELASQUEZ Director
- -------------------------
Arthur R. Velasquez
-50-
<PAGE>
PEOPLES ENERGY CORPORATION AND SUBSIDIARY COMPANIES
EXHIBIT INDEX
(a) The exhibits listed below are filed herewith and made a part hereof:
Exhibit
Number Description of Document
------- ------------------------------------------------------------
3(a) Amendment to the Articles of Incorporation of the
Registrant, dated March 3, 1995.
3(b) Articles of Incorporation of the Registrant, as last
amended, dated March 3, 1995.
10(a) Trust Under Executive Deferred Compensation Plan and
Supplemental Retirement Benefit Plan, Part A and Part
B, of the Registrant, effective September 25, 1995.
10(b) ETS Service Agreement between Peoples Gas and ANR Pipeline
Company, dated September 21, 1994.
10(c) FSS Service Agreement between Peoples Gas and ANR Pipeline
Company, dated September 21, 1994.
10(d) Storage Rate Schedule NSS Agreement between Peoples Gas and
Natural Gas Pipeline Company of America, dated
October 19, 1995.
10(e) Transportation Rate Schedule FTS Agreement between Peoples
Gas and Natural Gas Pipeline Company of America, dated
October 19, 1995.
10(f) Storage Rate Schedule DSS Agreement between Peoples Gas and
Natural Gas Pipeline Company of America, dated
December 1, 1995.
10(g) Transportation Rate Schedule FTS Agreement between Peoples
Gas and Natural Gas Pipeline Company of America, dated
December 1, 1995.
10(h) Firm Transportation Service Agreement Under Rate Schedule FT
between Peoples Gas and Trunkline Gas Company, dated as
of April 1, 1995.
10(i) Quick Notice Transportation Service Agreement Under Rate
Schedule QNT between Peoples Gas and Trunkline Gas
Company, dated as of December 1, 1995.
10(j) Quick Notice Transportation Service Agreement Under Rate
Schedule QNT between Peoples Gas and Trunkline Gas
Company, dated as of December 1, 1995.
10(k) ETS Service Agreement between North Shore Gas and ANR
Pipeline Company, dated September 21, 1994.
10(l) FSS Service Agreement between North Shore Gas and ANR
Pipeline Company, dated September 21, 1994.
-51-
<PAGE>
PEOPLES ENERGY CORPORATION AND SUBSIDIARY COMPANIES
EXHIBIT INDEX (Continued)
Exhibit
Number Description of Document
------- ------------------------------------------------------------
10(m) Transportation Rate Schedule FTS Agreement between North
Shore Gas and Natural Gas Pipeline Company of America,
dated September 22, 1995.
10(n) Storage Rate Schedule NSS Agreement between North Shore
Gas and Natural Gas Pipeline Company of America, dated
October 19, 1995.
10(o) Transportation Rate Schedule FTS Agreement between North
Shore Gas and Natural Gas Pipeline Company of America,
dated October 19, 1995.
10(p) Storage Rate Schedule DSS Agreement between North Shore
Gas and Natural Gas Pipeline Company of America, dated
December 1, 1995.
23 Arthur Andersen LLP consent to incorporation by reference in
Registration Statement Nos. 2-82760, 2-88307, 33-6369,
and 33-63193.
27 Financial Data Schedule
99 Form 11-K for the Employee Stock Purchase Plan of the
Registrant for the fiscal year ended September 30,
1995.
(b) Exhibits listed below have been filed heretofore with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended,
and/or the Securities Exchange Act of 1934, as amended, and are
incorporated herein by reference. The file number and exhibit number of
each such exhibit are stated in the description of such exhibits.
3(c) By-Laws of the Registrant, as amended on December 7, 1994
(Registrant Form 10-K for fiscal year ended September 30,
1994, Exhibit 3(d)).
4(a) The Peoples Gas Light and Coke Company First and Refunding
Mortgage, dated January 2, 1926, from Chicago By-Product
Coke Company to Illinois Merchants Trust Company, Trustee,
assumed by The Peoples Gas Light and Coke Company (Peoples)
by Indenture dated March 1, 1928 (Peoples - May 17, 1935,
Exhibit B-6a, Exhibit B-6b A-2 File No. 2-2151, 1936);
Supplemental Indenture dated as of May 20, 1936, (Peoples -
Form 8-K for the year 1936, Exhibit B-6f); Supplemental
Indenture dated as of March 10, 1950 (Peoples - Form 8-K for
the month of March 1950, Exhibit B-6i); Supplemental
Indenture dated as of June 1, 1951 (Peoples - File No. 2-
8989, Post-Effective, Exhibit 7-4(b)); Supplemental
Indenture dated as of
-52-
<PAGE>
PEOPLES ENERGY CORPORATION AND SUBSIDIARY COMPANIES
EXHIBIT INDEX (Continued)
Exhibit
Number Description of Document
------- ------------------------------------------------------------
4(a) July 15, 1966 (Peoples - Form 8-K for the month of July
1966, Exhibit 2);
cont. Supplemental Indenture dated as of August 15, 1967 (Peoples
- File No. 2-26983, Post-Effective, Exhibit 2-4);
Supplemental Indenture dated as of September 15, 1970
(Peoples - File No. 2-38168, Post-Effective Exhibit 2-2);
Supplemental Indenture dated as of April 1, 1972 (Peoples -
File No. 2-43367, Post-Effective Exhibit 2-2); Supplemental
Indenture dated as of July 15, 1973 (Peoples - File No. 2-
48430, Exhibit 4-2); Supplemental Indenture dated as of
June 1, 1984, and Supplemental Indenture dated as of October
1, 1984 (Peoples - Form 10-K for fiscal year ended September
30, 1984, Exhibits 4-1, 4-2 and 4-3, respectively);
Supplemental Indentures dated March 1, 1985, (Peoples -
Form 10-K for fiscal year ended September 30, 1985, Exhibits
4-1, 4-2, 4-3, 4-4, respectively); Supplemental Indenture
dated May 1, 1990 (Peoples - Form 10-K for the fiscal year
ended September 30, 1990, Exhibit 4); Supplemental Indenture
dated as of April 1, 1993 (Peoples - Form 8 dated as of May
5, 1993, Exhibit 1); Supplemental Indenture dated as of
December 1, 1993 (Peoples - Form 10-Q for the quarterly
period ended December 31, 1993, Exhibits 4(a) and 4(b)).
4(b) North Shore Gas Company (North Shore) Indenture, dated as of
April 1, 1955, from North Shore to Continental Bank,
National Association, as Trustee; Third Supplemental
Indenture, dated as of December 20, 1963 (North Shore - File
No. 2-35965, Exhibit 4-1); Fifth Supplemental Indenture
dated as of February 1, 1970 (North Shore - File No. 2-
35965, Exhibit 4-2); Sixth Supplemental Indenture dated as
of October 1, 1973 (North Shore) - Form 10-K for the fiscal
year ended September 30, 1980, Exhibit 4-3); Seventh
Supplemental Indenture dated as of February 15, 1977 (North
Shore - Form 10-K for the fiscal year ended September 30,
1980, Exhibit 4-4; Eighth Supplemental Indenture dated as of
September 15, 1980 (North Shore - Form 10-K for the fiscal
year ended September 30, 1980, Exhibit 4-5); Ninth
Supplemental Indenture dated as of December 1, 1987 (North
Shore - Form 10-K for the fiscal year ended September 30,
1987, Exhibit 4); Tenth Supplemental Indenture dated as of
November 1, 1990 (North Shore - Form S-3 Registration
Statement No. 33-37332, Exhibit 4b); and Eleventh
Supplemental Indenture dated as of October 1, 1992 (North
Shore - Form 10-K for the fiscal year ended September 30,
1992, Exhibit 4): Twelfth Supplemental Indenture dated as of
April 1, 1993 (North Shore - Form 8-K dated April 23, 1993,
Exhibit 4).
10(q) Firm Transportation Service Agreement Under Rate Schedule
FTS between Peoples Gas and Natural Gas Pipeline Company of
America, dated as of August 13, 1990 (Registrant Form 10-K
for fiscal year ended September 30, 1993, Exhibit 10(b));
Firm Transportation Service Agreement Under Rate Schedule
FTS between Peoples Gas and Natural Gas Pipeline Company of
America, dated as of October 8, 1990 (Registrant Form 10-K
for fiscal year ended September 30, 1993, Exhibit 10(c));
Firm Transportation Service Agreement Under Rate Schedule
FTS between Peoples Gas and Natural Gas Pipeline Company of
America, dated as of January 1, 1992
-53-
<PAGE>
PEOPLES ENERGY CORPORATION AND SUBSIDIARY COMPANIES
EXHIBIT INDEX (Continued)
Exhibit
Number Description of Document
------- ------------------------------------------------------------
10(q) (Registrant Form 10-K for fiscal year ended September 30,
1993, Exhibit 10(e));
cont. Firm Transportation Service Agreement Under Rate Schedule
FTS between Peoples Gas and Natural Gas Pipeline Company of
America, dated as of January 1, 1992 (Registrant Form 10-K
for fiscal year ended September 30, 1993, Exhibit 10(f));
Firm Transportation Service Agreement Under Rate Schedule
FTS between Peoples Gas and Natural Gas Pipeline Company of
America, dated as of January 1, 1992 (Registrant Form 10-K
for fiscal year ended September 30, 1993, Exhibit 10(g));
Firm Transportation Service Agreement Under Rate Schedule
FTS between Peoples Gas and Natural Gas Pipeline Company of
America, dated as of February 1, 1992 (Registrant Form 10-K
for fiscal year ended September 30, 1993, Exhibit 10(h)).
Firm Transportation Service Agreement Under Rate Schedule FT
between Peoples Gas and Trunkline Gas Company, dated as of
December 1, 1993 (Registrant Form 10-K for the fiscal year
ended September 30, 1994, Exhibit 10(d)).
10(r) Lease dated October 20, 1993, between Prudential Plaza
Associates, as Landlord, and Peoples Gas, as Tenant
(Registrant Form 10-Q for the quarterly period ended
December 31, 1993, Exhibit 10(a)).
10(s) Construction Guaranty Agreement dated December 16, 1992, by
the Company and Trigen Energy Corporation (Registrant Form
10-Q for the quarterly period ended December 31, 1993,
Exhibit 10(f)); Service Guaranty Agreement dated
December 16, 1992, by the Company and Trigen Energy
Corporation (Registrant Form 10-Q for the quarterly period
ended December 31, 1993, Exhibit 10(g)).
10(t) Short-Term Incentive Compensation Plan of the Registrant, as
amended on December 7, 1994 (Registrant Form 10-K for the
fiscal year ended September 30, 1994, Exhibit 10(a));
Executive Deferred Compensation Plan of the Registrant,
effective October 1, 1994 (Registrant Form 10-K for the
fiscal year ended September 30, 1994, Exhibit 10(b));
Supplemental Retirement Benefit Plan, Part A, Part B and
Part C, of the Registrant, effective December 7, 1994
(Registrant Form 10-K for the fiscal year ended
September 30, 1994, Exhibit 10(c)); Long-Term Incentive
Compensation Plan (File No. 33-63193, Form S-8 filed on
October 4, 1995).
21 Subsidiaries of the Registrant (Registrant Form 10-K for the
fiscal year ended September 30, 1982, Exhibit 22).
-54-
<PAGE>
EXHIBIT 3(a)
File Number 4791-313-6
----------
STATE OF ILLINOIS
OFFICE OF
THE SECRETARY OF STATE
Whereas, ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF
PEOPLES ENERGY CORPORATION
INCORPORATED UNDER THE LAWS OF THE STATE OF ILLINOIS HAVE BEEN FILED IN THE
OFFICE OF THE SECRETARY OF STATE AS PROVIDED BY THE BUSINESS CORPORATION ACT OF
ILLINOIS, IN FORCE JULY 1, A.D. 1984.
Now, Therefore, I, George H. Ryan, Secretary of State of the State of Illinois,
by virtue of the powers vested in me by law, do hereby issue this certificate
and attach hereto a copy of the Application of the aforesaid corporation.
In Testimony Whereof, I hereto set my hand and cause to be affixed the
Great Seal of the State of Illinois, at the City of Springfield, this 3rd day of
March A.D. 1995 and of the Independence of the United States the two hundred and
19th.
/s/George H. Ryan
(SEAL) Secretary of State
<PAGE>
FORM BCA-10.30 ARTICLES OF AMENDMENT File #4791-313-6
- --------------------------------------------------------------------------------
(Rev. Jan. 1995)
- --------------------------------------------------------------------------------
George H. Ryan SUBMIT IN DUPLICATE
Secretary of State This space for use by
Department of Business Secretary of State
Services
Springfield, IL 62756
Telephone (217) 782-1832 FILED Date 03-03-95
MAR 3 1995 Franchise Tax $
Remit payment in check GEORGE H. RYAN Filing Fee* $25.00
or money order, payable to SECRETARY OF STATE Penalty $
"Secretary of State."
Approved: MA
*The filing fee for articles of amendment - $25.00
- --------------------------------------------------------------------------------
1. CORPORATE NAME: PEOPLES ENERGY CORPORATION
--------------------------------------------------
(Note 1)
2. MANNER OF ADOPTION OF AMENDMENT:
The following amendment of the Articles of Incorporation was adopted on
February 24, 1995 in the manner indicated below. ("X" one box only)
[ ] By a majority of the incorporators, provided no directors were named
in the articles of incorporation and no directors have been elected;
(Note 2)
[ ] By a majority of the board of directors, in accordance with Section
10.10, the corporation having issued no shares as of the time of
adoption of this amendment; (Note 2)
[ ] By a majority of the board of directors, in accordance with Section
10.15, shares having been issued but shareholder action not being
required for the adoption of the amendment; (Note 3)
[X] By the shareholders, in accordance with Section 10.20, a resolution of
the board of directors having been duly adopted and submitted to the
shareholders. At a meeting of shareholders, not less than the minimum
number of votes required by statute and by the articles of
incorporation were voted in favor of the amendment; (Note 4)
[ ] By the shareholders, in accordance with Sections 10.20 and 7.10, a
resolution of the board of directors having been duly adopted and
submitted to the shareholders. A consent in writing has been signed
by shareholders having not less than the minimum number of votes
required by statute and by the articles of incorporation.
Shareholders who have not consented in writing have been given notice
in accordance with Section 7.10; (Notes 4&5)
[ ] By the shareholders, in accordance with Sections 10.20 and 7.10, a
resolution of the board of directors having been duly adopted and
submitted to the shareholders. A consent in writing has been signed
by all the shareholders entitled to vote on this amendment.
(Note 5)
3. TEXT OF AMENDMENT:
a. When amendment effects a name change, insert the new corporate name
below. Use Page 2 for all other amendments.
Article I: The name of the corporation is:
- --------------------------------------------------------------------------------
(NEW NAME)
all changes other than name, include on page 2
(over)
<PAGE>
Text of Amendment
b. (If amendment affects the corporate purpose, the amended purpose is
required to be set forth in its entirety. If there is not sufficient space
to do so, add one or more sheets of this size.)
(See attached pages)
Page 2
<PAGE>
The Articles of Incorporation are amended by adding the following new
Article Ten and Article Eleven thereto:
ARTICLE TEN
No director of the corporation shall be liable to the corporation
or to the shareholders of the corporation for monetary damages
for breach of fiduciary duties as a director, provided that this
Article Ten shall not eliminate or limit the liability of a
director (i) for any breach of the director's duty of loyalty to
the corporation or its shareholders, (ii) for acts or omissions
not in good faith or that involve intentional misconduct or a
knowing violation of law, (iii) under Section 8.65 of the
Illinois Business Corporation Act of 1983, as amended or (iv) for
any transaction from which the director derived an improper
personal benefit. This Article Ten shall not eliminate or limit
the liability of a director of the corporation for any act or
omission occurring before the date on which this Article Ten
becomes effective. Any repeal or modification of this Article
Ten by the shareholders of the corporation shall not adversely
affect any right or protection of a director of the corporation
existing at the time of such repeal or modification.
ARTICLE ELEVEN
Paragraph 1: The corporation shall indemnify, to the fullest extent permitted
under the laws of the State of Illinois and any other applicable
laws, as they now exist or as they may be amended in the future,
any person who was or is a party, or is threatened to be made a
party, to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative (including, without limitation, an action by or in
the right of the corporation), by reason of the fact that he or
she is or was a director, officer or employee of the corporation,
or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation,
<PAGE>
partnership, joint venture, trust, employee benefit plan or other
enterprise against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such
action, suit or proceeding.
Paragraph 2: Expenses incurred by such a director, officer or employee in
defending a civil or criminal action, suit or proceeding shall be
paid by the corporation in advance of the final disposition of
such action, suit or proceeding to the fullest extent permitted
under the laws of the State of Illinois and any other applicable
laws, as they now exist or as they may be amended in the future.
Paragraph 3: The board of directors may, by resolution, extend the provisions
of this Article Eleven regarding indemnification and the
advancement of expenses to any person who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action, suit or proceeding by reason of the fact he or
she is or was an agent of the corporation or is or was serving at
the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise.
Paragraph 4: The rights provided by or granted under this Article Eleven are
not exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled.
Paragraph 5: The indemnification and advancement of expenses provided by or
granted under this Article Eleven shall continue as to a person
who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs, executors and
administrators of that person.
<PAGE>
4. The manner, if not set forth in Article 3b, in which any exchange,
reclassification or cancellation of issued shares, or a reduction of the
number of authorized shares of any class below the number of issued shares
of that class, provided for or effected by this amendment, is as follows:
(If not applicable, insert "No change")
No change.
5. (a) The manner, if not set forth in Article 3b, in which said amendment
effects a change in the amount of paid-in capital (Paid-in capital replaces
the terms Stated Capital and Paid-in Surplus and is equal to the total of
these accounts) is as follows: (if not applicable, insert "No change")
No change.
(b) The amount of paid-in capital (Paid-in Capital replaces the terms
Stated Capital and Paid-in Surplus and is equal to the total of these
accounts) as changed by this amendment is as follows: (If not applicable,
insert "No change")
No change.
Before Amendment After Amendment
Paid-in Capital $ $
--------------- --------------
(Complete either Item 6 or 7 below. All signatures must be in BLACK INK.)
6. The undersigned corporation has caused this statement to be signed by its
duly authorized officers, each of whom affirms, under penalties of perjury,
that the facts stated herein are true.
Dated March 2, 1995 PEOPLES ENERGY CORPORATION
--------------------------
(Exact Name of Corporation at date of
execution)
attested by /s/Emmet P. Cassidy by /s/Kenneth S. Balaskovits
------------------- -------------------------
(Signature of Secretary) (Signature of Vice President)
Emmet P. Cassidy, Secretary Kenneth S. Balaskovits, Vice President
- --------------------------- --------------------------------------
(Type or Print Name and Title) (Type or Print Name and Title)
7. If amendment is authorized pursuant to Section 10.10 by the incorporators,
the incorporators must sign below, and type or print name and title.
OR
If amendment is authorized by the directors pursuant to Section 10.10 and
there are no officers, then a majority of the directors or such directors
as may be designated by the board, must sign below, and type or print name
and title.
The undersigned affirms, under the penalties of perjury, that the facts stated
herein are true.
Dated , 19
- -------------------- ---
- ---------------------- --------------------
- ---------------------- --------------------
- ---------------------- --------------------
- ---------------------- --------------------
Page 3
<PAGE>
NOTES and INSTRUCTIONS
NOTE 1: State the true exact corporate name as it appears on the records of
the office of the Secretary of State, BEFORE any amendments herein
reported.
NOTE 2: Incorporators are permitted to adopt amendments ONLY before any shares
have been issued and before any directors have been named or elected.
(Section 10.10)
NOTE 3: Directors may adopt amendments without shareholder approval in only
seven instances, as follows:
(a) to remove the names and addresses of directors named in the
articles of incorporation;
(b) to remove the name and address of the initial registered agent
and registered office, provided a statement pursuant to
Section 5.10 is also filed;
(c) to increase, decrease, create or eliminate the par value of the
shares of any class, so long as no class or series of shares is
adversely affected.
(d) to split the issued whole shares and unissued authorized shares
by multiplying them by a whole number, so long as no class or
series is adversely affected thereby;
(e) to change the corporate name by substituting the word
"corporation", "incorporated", "company", "limited", or the
abbreviation "corp", "inc.", "co.," or "ltd." for a similar word
or abbreviation in the name, or by adding a geographical
attribution to the name;
(f) to reduce the authorized shares of any class pursuant to a
cancellation statement filed in accordance with Section 9.05,
(g) to restate the articles of incorporation as currently amended.
(Section 10.15)
NOTE 4: All amendments not adopted under Section 10.10 or Section 10.15
require (1) that the board of directors adopt a resolution setting
forth the proposed amendment and (2) that the shareholders approve the
amendment.
Shareholder approval may be (1) by vote at a shareholders' meeting
(either annual or special) or (2) by consent, in writing, without a
meeting.
To be adopted, the amendment must receive the affirmative vote or
consent of the holders of at least 2/3 of the outstanding shares
entitled to vote on the amendment (but if class voting applies, then
also at least 2/3 vote within each class is required).
The articles of incorporation may supersede the 2/3 vote requirement
by specifying any smaller or larger vote requirement not less than a
majority of the outstanding shares entitled to vote and not less than
a majority within each class when class voting applies. (Section
10.20)
NOTE 5: When shareholder approval is by consent, all shareholders must be
given notice of the proposed amendment at least 5 days before the
consent is signed. If the amendment is adopted, shareholders who have
not signed the consent must be promptly notified of the passage of the
amendment. (Sections 7.10 & 10.20)
C-173.9
Page 4
<PAGE>
File #D4791-313-6
Form BCA-5.10
NFP-105.10
(Rev. Jan. 1995)
George H. Ryan
Secretary of State
Department of Business
Services
Springfield, IL 62756
Telephone (217) 782-3647 SUBMIT IN DUPLICATE
STATEMENT OF FILED This space for use by
CHANGE MAR 8 1995 Secretary of State
OF REGISTERED AGENT
AND/OR REGISTERED GEORGE H. RYAN Date 03-08-95
OFFICE SECRETARY OF STATE
Filing Fee $ 5
Approved: MA
PAID Remit payment in check or
money order, payable to
MAR 8 1995 "Secretary of State"
1. CORPORATE NAME: Peoples Energy Corporation
--------------------------
2. STATE OR COUNTRY OF INCORPORATION: Illinois
--------
- --------------------------------------------------------------------------------
3. Name and address of the registered agent and registered office as they
appear on the records of the office of the Secretary of State (before
change):
Registered Agent Emmet P. Cassidy
-------------------------------------------------------
First Name Middle Name Last Name
Registered Office 122 S. Michigan Avenue
-------------------------------------------------------
Number Street Suite No. (A.P.O. Box alone is not
acceptable)
Chicago 60603 Cook
-------------------------------------------------------
City Zip Code County
4. Name and address of the registered agent and registered office shall be
(after all changes herein reported):
Registered Agent Emmet P. Cassidy
-------------------------------------------------------
First Name Middle Name Last Name
Registered Office 130 E. Randolph Drive
-------------------------------------------------------
Number Street Suite No. (A.P.O. Box alone is not
acceptable)
Chicago 60601 Cook
-------------------------------------------------------
City Zip Code County
<PAGE>
AFTER RECORDING RETURN TO:
Frankie Shaffer
Peoples Energy Corporation
130 East Randolph Dr. 24th FL
Chicago, IL 60601
5. The address of the registered office and the address of the business office
of the registered agent, as changed, will be identical.
6. The above change was authorized by: ("X" one box only)
a.[ ] By resolution duly adopted by the board of directors. (Note 5)
b.[X] By action of the registered agent. (Note 6)
NOTE: When the registered agent changes, the signatures of both
president and secretary are required.
7. (If authorized by the board of directors, sign here. See Note 5)
The undersigned corporation has caused this statement to be signed by its
duly authorized officers, each of whom affirms, under penalties of perjury, that
the facts stated herein are true.
Dated 19,
--------------- ------- -----------------------------------
(Exact Name of Corporation)
attested by by
---------------------------- -------------------------
(Signature of Secretary or (Signature of Vice
Assistant Secretary) President)
---------------------------------- ------------------------
(Type or Print Name and Title) (Type or Print Name and Title)
(If change of registered office by registered agent, sign here. See Note 6)
The undersigned, under penalties of perjury, affirms that the facts stated
herein are true.
Dated February 17, 1995 /s/Emmet P. Cassidy
----------------- -------------------
(Signature of Registered
Agent of Record)
NOTES
1. The registered office may, but need not be the same as the principal office
of the corporation. However the registered office and the office address
of the registered agent must be the same.
2. The registered office must include a street or road address; a post office
box number alone is not acceptable.
3. A corporation cannot act as its own registered agent.
4. If the registered office is changed from one county to another, then the
corporation must file with the recorder of deeds of the new county a
certified copy of the articles of incorporation and a certified copy of the
statement of change of registered office. Such certified copies may be
obtained ONLY from the Secretary of State.
5. Any change of registered agent must be by resolution adopted by the board
of directors. This statement must then be signed by the president (or
vice-president) and by the secretary (or an assistant secretary).
6. The registered agent may report a change of the registered office of the
corporation for which he or she is registered agent. When the agent
reports such a change, this statement must be signed by the registered
agent.
<PAGE>
Exhibit 3(b)
Certificate Number 23828
STATE OF ILLINOIS
OFFICE OF
THE SECRETARY OF STATE
To all to whom these Presents Shall Come, Greeting:
Whereas, Articles of Incorporation duly signed and verified of Peoples Gas
Company have been filed in the Office of the Secretary of State on the 3rd day
of August A.D. 1967, as provided by "THE BUSINESS CORPORATION ACT" of Illinois,
in force July 13, A.D. 1933.
Now Therefore, I, Paul Powell, Secretary of State of the State of Illinois, by
virtue of the powers vested in me by law, do hereby issue this certificate of
incorporation and attach thereto a copy of the Articles of Incorporation of the
aforesaid corporation.
In Testimony Whereof, I hereto set my hand and cause to be affixed the Great
Seal of the State of Illinois, Done at the City of Springfield this 3rd day of
August A.D. 1967 and of the Independence of the United States the one hundred
and 92nd.
/s/Paul Powell
- --------------
Secretary of State
(SEAL)
<PAGE>
FORM B C A-47
BEFORE ATTEMPTING TO EXECUTE THESE BLANKS BE SURE TO READ CAREFULLY
THE INSTRUCTIONS ON THE BACK THEREOF.
(THESE ARTICLES MUST BE FILED IN DUPLICATE)
-----------------------------
(Do not write in this space)
STATE OF ILLINOIS, } Date Paid 8-3-1967
} ss. Initial License Fee $ .50
COOK COUNTY } Franchise Tax $ 91.67
Filing Fee $ 75.00
Clerk
TO PAUL POWELL, Secretary of State:
The undersigned,
- -------------------------------------------------------------------------------
Address
Name Number Street City State
- -------------------------------------------------------------------------------
William P. O'Keefe 2543 Morse Avenue, Chicago, IL 60645
- -------------------------------------------------------------------------------
Philip B. Hill 1149 Third Avenue, Des Plaines, IL 60016
- -------------------------------------------------------------------------------
Steven L. Larson 1049 North Shore Avenue, Chicago, IL 60626
- -------------------------------------------------------------------------------
being one or more natural persons of the age of twenty-one years or more or
a corporation, and having subscribed to shares of the corporation to be
organized pursuant hereto, for the purpose of forming a corporation under
"The Business Corporation Act" of the State of Illinois, do hereby adopt
the following Articles of Incorporation:
ARTICLE ONE
The name of the corporation hereby incorporated is: Peoples Gas Company
ARTICLE TWO
The address of its initial registered office in the State of Illinois is: Room
1615, 122 South Michigan Avenue Street, in the City of Chicago (60603) County of
Cook and the name of its initial Registered Agent at said address is: Joseph M.
Wells
ARTICLE THREE
The duration of the corporation is: perpetual
PAID
AUG 4 1967
/s/Paul Powell
Secretary of State
<PAGE>
ARTICLE FOUR
The purpose or purposes for which the corporation is organized are:
Directly, or indirectly through investments in subsidiaries or
otherwise, to purchase or otherwise acquire, explore for, produce, manufacture,
generate, store, hold, own, consume, exchange, deal in, transport, transmit,
distribute, dispose of, promote the use of, and sell natural or manufactured gas
and any and all other forms or sources of energy, and any and all products and
by-products derived in any way therefrom, for, or to any and all persons for
fuel, heating, cooling, air conditioning, cooking, drying, lighting, power and
any and all other purposes;
To acquire, through the purchase of stock or otherwise, other
corporations, companies, firms, and associations, or any interest therein, and
to own and operate, as subsidiaries or otherwise, and to finance the activities
and businesses of, said corporations, companies, firms, and associations;
To acquire, own, use, convey and otherwise dispose of and deal in any
and all ways in real or personal property or any interest therein;
To manufacture, buy, sell, deal in and with goods, wares, merchandise,
and personal property of every kind and description.
ARTICLE FIVE
PARAGRAPH 1: The aggregate number of shares which the corporation is authorized
to issue is 20,000,000, divided into one (1) class. The designation of each
class, the number of shares of each class, and the par value, if any, of the
shares of each class, or a statement that the shares of any class are without
par value, are as follows:
Series Number Par value per share or statement that shares
Class (If Any) of Shares are without par value.
Common None 20,000,000 Without par value
PARAGRAPH 2: The preferences, qualifications, limitations, restrictions and the
special or relative rights in respect of the shares of each class are: None
<PAGE>
ARTICLE SIX
The class and number of shares which the corporation proposes to issue
without further report to the Secretary of State, and the consideration
(expressed in dollars) to be received by the corporation therefor, are:
Class of shares Number of shares Total consideration to be received therefor:
Common 100 $1,000.00
ARTICLE SEVEN
The corporation will not commence business until at least one thousand
dollars has been received as consideration for the issuance of shares.
ARTICLE EIGHT
The number of directors to be elected at the first meeting of the shareholders
is: Nine
ARTICLE NINE
PARAGRAPH 1: It is estimated that the value of all property to be owned by the
corporation for the following year wherever located will be $
--------
PARAGRAPH 2: It is estimated that the value of the property to be located
within the State of Illinois during the following year will be $
-----------
PARAGRAPH 3: It is estimated that the gross amount of business which will be
transacted by the corporation during the following year will be $
----------
PARAGRAPH 4: It is estimated that the gross amount of business which will be
transacted at or from places of business in the State of Illinois during the
following year will be $
------------
NOTE: If all the property of the corporation is to be located in this
State and all of its business is to be transacted at or from places of business
in this State, or if the incorporators elect to pay the initial franchise tax on
the basis of its entire stated capital and paid-in surplus, then the information
called for in the Article Nine need not be stated.
<PAGE>
/s/William P. O'Keefe)
---------------------
/s/Philip B. Hill ) Incorporators
---------------------
/s/Steven L. Larson )
---------------------
NOTE: There may be one or more incorporators. Each incorporator shall be either
a corporation, domestic or foreign, or a natural person of the age of twenty-one
years or more. If a corporation acts as incorporator, the name of the
corporation and state of incorporation shall be shown and the execution must be
by its President or Vice-President and verified by him, and the corporate seal
shall be affixed and attested by its Secretary or an Assistant Secretary.
OATH AND ACKNOWLEDGMENT
STATE OF ILLINOIS }
} ss.
Cook County }
I, /s/Mary L. Forsberg, A Notary Public, do hereby certify that on the 1st day
of August, 1967 William P. O'Keefe, Philip B. Hill, and Steven L. Larson
personally appeared before me and being first duly sworn by me acknowledged the
signing of the foregoing document in the respective capacities therein set forth
and declared that the statements therein contained are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year above
written.
Place /s/Mary L. Forsberg
-------------------
(NOTARIAL SEAL) Notary Public
Here
FORM B C A-47
ARTICLES OF INCORPORATION
The following fees are required to be paid at the time of issuing certificate of
incorporation: Filing fee, $20.00; Initial license fee of 50 cents per
$1,000.00 or 1/20 of 1 percent of the amount of stated capital and paid-in
surplus the corporation proposes to issue without further report (Article Six);
Franchise tax of 1/20 of 1 percent of the issued, as above noted. However, the
minimum annual franchise tax is $10.00 and varies monthly on $20,000 or less, as
follows: January, $15; February, $14.17; March, $13.34; April, $12.50; May,
$11.67; June, $10.84; July, $10.00; August, $9.17; September, $8.34; October,
$7.50; November, $6.67; December, $5.84; (See Sec. 133, BCA).
In excess of $20,000 the franchise tax per $1,000.00 is as follows: January,
$0.75; February, .7084; March, .6667; April, .625; May, .5834; June, .5417;
July, .50; August, .4584; September, .4167; October, .375; November, .3334;
December, .2917. All shares issued in excess of the amount mentioned in Article
Six of this application must be reported within 60 days from date of issuance
thereof, and franchise tax and license fee paid thereon; otherwise, the
corporation is subject to a penalty of 1% for each month on the amount until
reported and subject to a fine of not to exceed $500.00.
The same fees are required for a subsequent issue of shares except the filing
fee is $1.00 instead of $20.00.
FILED
AUG 3 - 1967
/s/Paul Powell
Secretary of State
<PAGE>
Certificate Number 875
State of Illinois
Office of
The Secretary of State
To all to whom these Presents Shall Come, Greeting:
Whereas, Articles of MERGER duly signed and verified of PEOPLES GAS COMPANY
(DELAWARE), a Delaware corporation, Merged into PEOPLES GAS COMPANY, an Illinois
corporation have been filed in the Office of the Secretary of State on the 15th
day of February A.D. 1968, as provided by "THE BUSINESS CORPORATION ACT" of
Illinois, in force July 13, A.D. 1933, as amended; Now Therefore, I, Paul
Powell, Secretary of State of the State of Illinois, by virtue of the powers
vested in me by law, do hereby issue this certificate of Merger and attach
thereto a copy of the Articles of Merger of the aforesaid corporation.
In Testimony Whereof, I hereto set my hand and cause to be affixed the Great
Seal of the State of Illinois, Done at the City of Springfield this 15th day of
February A.D. 1968 and of the Independence of the United States the one hundred
and 92nd.
/s/Paul Powell
-------------------
(SEAL) Secretary of State
<PAGE>
FORM F-D
ARTICLES OF MERGER OF DOMESTIC AND FOREIGN CORPORATION
----------------------------
(Do not write in this space)
Date Paid 2-15-1968
Filling Fee $100.00
Clerk
To: Paul Powell, Secretary of State,
The undersigned corporations, pursuant to Section 69a of "The Business
Corporation Act" of the State of Illinois, hereby execute the following articles
of merger:
ARTICLE ONE
The names of the corporations proposing to merge and the names of the States
under the laws of which such corporations are organized, are as follows:
Name of Corporation State of Incorporation
Peoples Gas Company Illinois
----------------------------------- ------------------------
Peoples Gas Company(Deleware) Delaware
----------------------------------- ------------------------
----------------------------------- ------------------------
----------------------------------- ------------------------
ARTICLE TWO
The laws of Delaware, the State under which such foreign corporation is
organized, permit such merger.
ARTICLE THREE
The name of the surviving corporation shall be Peoples Gas Company and it shall
be governed by the laws of the State of Illinois.
ARTICLE FOUR
The plan of merger is as follows:
PAID
FEB 15 1968
/s/Paul Powell
Secretary of State
<PAGE>
ARTICLE FIVE
As to each corporation, the number of shares outstanding, the number of shares
entitled to vote, and the number and designation of the shares of any class
entitled to vote as a class, are:
<TABLE>
<CAPTION>
Designation of
Name of Total Number of Total Number of Class Entitled to Number of
Corporation Shares Shares Entitled Vote as a Shares of Such
Outstanding to Vote Class (if any) Class (if any)
<S> <C> <C> <C> <C>
Peoples Gas Company 100 100 None None
- ------------------- --- --- ---- ----
Peoples Gas Company 100* 100 None None
- ------------------- --- --- ---- ----
( Delaware)
- ------------------- --- --- ---- ----
</TABLE>
*As of date of the stockholder's meeting approving the merger herein 100 common
shares were outstanding. Subsequent thereto an additional 13,677,642 of said
shares were issued as contemplated in the Agreement and Plan of Merger.
ARTICLE SIX
As to each corporation, the number of shares voted for and against the plan,
respectively, and the number of shares of any class entitled to vote as a class
voted for and against the plan, are:
<TABLE>
<CAPTION>
Name of Total Shares Total Shares Shares Shares
Corporation Voted for Voted Against Class Voted for Voted Against
<S> <C> <C> <C> <C> <C>
Peoples Gas
Company 100 None N/A N/A N/A
- ------- --- ---- --- --- ---
Peoples Gas
Company 100 None N/A N/A N/A
- ------- --- ---- --- --- ---
(Delaware)
</TABLE>
ARTICLE SEVEN
All provisions of the laws of the State of Illinois and the State of Delaware
applicable to the proposed merger have been complied with.
<PAGE>
AGREEMENT
AND
PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, entered into the 7th day of December,
1967 (hereinafter referred to as the "Agreement"), by and between PEOPLES GAS
COMPANY (hereinafter sometimes referred to as "Peoples Illinois"), and PEOPLES
GAS COMPANY (DELAWARE) (hereinafter sometimes referred to as "Peoples
Delaware"), (said corporations being hereinafter sometimes referred to as the
"Constituent Corporations"),
WITNESSETH:
WHEREAS, Peoples Illinois is a corporation duly organized and existing
under the laws of the State of Illinois; and
WHEREAS, Peoples Illinois is authorized to issue 20,000,000 common shares
without par value ("Peoples Illinois shares"), of which 100 shares are presently
issued and outstanding and held of record by The Peoples Gas Light and Coke
Company, an Illinois corporation ("Peoples Gas"); and
WHEREAS, Peoples Delaware is a corporation duly organized and existing
under the laws of the State of Delaware; and
WHEREAS, Peoples Delaware is authorized to issue 100 shares of common
stock, without par value ("Peoples Delaware shares"), all of which shares are
presently issued and outstanding and held of record by Peoples Gas; and
<PAGE>
- 2 -
WHEREAS, pursuant to a Plan and Agreement of Rearrangement dated August 11,
1967, among Peoples Gas, Peoples Delaware and Peoples Illinois, Peoples Delaware
has offered to acquire all of the presently outstanding shares of capital stock
of Peoples Gas ("Peoples Gas shares") in exchange for Peoples Delaware shares on
a share for share basis (the "Exchange Offer") and, pursuant to the Exchange
Offer, will increase the number of said shares which it is authorized to issue
to 15, 884, 636 shares and will issue not to exceed that number of said shares
in exchange for Peoples Gas shares prior to the effective date of the merger
herein contemplated; and
WHEREAS, the Boards of Directors of Peoples Illinois and Peoples Delaware
have, by majority vote of the members of each of said Boards of Directors,
approved the Agreement hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, promises, covenants, grants and provisions herein contained, it is
hereby agreed by and between the parties hereto, subject to the approval and
adoption of this Agreement by the shareholder of Peoples Illinois and the
stockholder of Peoples Delaware, and subject to the conditions hereinafter set
forth, that Peoples Delaware be merged into and with Peoples Gas Company (herein
sometimes referred to as "Peoples Illinois" or as the "Surviving Corporation"),
the name
<PAGE>
- 3 -
of the Surviving Corporation is and shall continue to be Peoples Gas Company,
and the separate existence of Peoples Delaware shall cease; and that the terms
and conditions of the merger hereby agreed upon and the mode of carrying the
same into effect and the manner of converting the shares of Peoples Delaware
into shares of the Surviving Corporation are and shall be as hereinafter set
forth.
ARTICLE I
Except as hereinafter otherwise specifically set forth, upon the effective
date of the merger the corporate identity, existence, purposes, franchises,
powers, rights and immunities of Peoples Illinois shall continue unaffected and
unimpaired by the merger, and the corporate identity, existence, purposes,
franchises, powers, rights and immunities of Peoples Delaware shall be merged
into Peoples Illinois and Peoples Illinois shall be fully vested therewith. The
name of the Surviving Corporation shall be Peoples Gas Company. Its principal
office shall be at 122 South Michigan Avenue, Chicago, Illinois 60603.
ARTICLE II
The Articles of Incorporation of Peoples Illinois in effect on the
effective date of the merger shall be the Articles of Incorporation of the
Surviving Corporation. The purposes of the Surviving Corporation shall be as
set forth in those Articles of Incorporation.
<PAGE>
- 4 -
ARTICLE III
Until altered, amended or repealed, the By-laws of Peoples Illinois in
effect on the effective date of the merger shall be the By-laws of the Surviving
Corporation.
ARTICLE IV
The members of the Board of Directors and officers of Peoples Illinois
holding office on the effective date of the merger shall continue in their
respective offices and be the directors and officers of the Surviving
Corporation until their respective successors shall be elected and qualified.
ARTICLE V
The mode of carrying into effect the merger herein provided for and the
manner and basis of converting the shares of the Constituent Corporations into
shares of the Surviving Corporation shall be as follows:
1. All of the 100 outstanding Peoples Illinois shares held by Peoples Gas
shall be canceled.
2. All of the Peoples Delaware shares which will be outstanding on the
effective date of the merger and issued pursuant to the Exchange Offer in
consideration for Peoples Gas shares, shall be converted into Peoples Illinois
shares on a share for share basis; except that the 100 presently outstanding
Peoples Delaware shares held by Peoples Gas shall be canceled.
<PAGE>
- 5 -
3. All Peoples Illinois shares issued to holders of Peoples Delaware
shares shall be in full satisfaction of all rights pertaining to the Peoples
Delaware shares and shall be full paid and non-assessable shares of Peoples
Illinois, the Surviving Corporation.
ARTICLE VI
1. Upon the effective date of the merger, the separate existence of
Peoples Delaware shall cease, and in accordance with this Agreement, the
Surviving Corporation, as a single corporation, shall possess all the rights,
claims, demands, privileges, powers and franchises of a public as well as of a
private nature, and be subject to all the restrictions, disabilities and duties
of each of said Constituent Corporations; and all and singular the rights,
claims, demands, privileges, powers and franchises of each of said Constituent
Corporations, and all property, real, personal and mixed, and all debts due to
either of said Constituent Corporations on whatever account, as well as for all
other things in action or belonging to each of said Constituent Corporations,
shall be vested in the Surviving Corporation; and all property, rights, claims,
demands,privileges, powers and franchises, and all and every other interest
shall be thereafter as effectively the property of the Surviving Corporation as
they were of said Constituent Corporations; PROVIDED, that all rights of
creditors and all liens upon any property of either of said Constituent
Corporations shall be preserved unimpaired, the liens being limited to the
property affected by such liens on the effective date of the merger, and all
debts, liabilities and obligations of said Constituent Corporations shall
thenceforth attach to the Surviving Corporation.
<PAGE>
- 6 -
If at any time the Surviving Corporation shall deem or be advised that any
further assignments, assurances in law or other acts or instruments are
necessary or desirable to vest or confirm in the Surviving Corporation the title
to any property of Peoples Delaware, its proper officers and directors shall and
will do all such acts and things as may be necessary or proper to vest or
confirm title to such property in the Surviving Corporation and otherwise to
carry out the purposes of this Agreement.
2. The Surviving Corporation, from and after the effective date of the
merger, agrees that it may be served with process in the State of Delaware, in
any proceeding for enforcement of any obligation of Peoples Delaware as well as
for enforcement of any obligation of the Constituent Corporations arising from
the merger, including any suit or other proceeding to enforce the right of any
stockholder as determined in any appraisal proceeding pursuant to Section 262 of
the General Corporation Law of the State of Delaware, and hereby irrevocably
appoints the Secretary of State of the State of Delaware as its agent to accept
service of process in any such suit or other proceeding. The address to which a
copy of such process shall be mailed by the Secretary of State shall be Peoples
Gas Company, 122 South Michigan Avenue, Chicago, Illinois 60603.
<PAGE>
- 7 -
ARTICLE VII
This Agreement shall be submitted for approval and adoption to the
stockholder of Peoples Delaware and shareholder of Peoples Illinois as provided
by Section 252 of the General Corporation Law of the State of Delaware and
Section 69a of the Illinois Business Corporation Act. If approved and adopted,
the Secretary or Assistant Secretary of each of the Constituent Corporations
shall under the corporate seal thereof certify the vote and action of the
stockholder or the shareholder, as the case may be, of the Corporation of which
he is an officer. Upon approval and adoption of this Agreement by the
stockholder or the shareholder, as the case may be, of the Constituent
Corporation, the President, an Executive Vice President, or a Vice President and
the Secretary or an Assistant Secretary of each such Constituent Corporation
shall thereupon execute Articles of Merger and their signatures shall be duly
acknowledged by them before a notary public. Promptly following the effective
date of the exchange of capital stock by the holders of Peoples Gas shares for
shares of Peoples Delaware, pursuant to the Exchange Offer, the proper officers
of the Constituent Corporations shall make the requisite filings with the proper
public officials in the States of Delaware and Illinois to promptly effect the
merger herein contemplated. Upon the issuance of a Certificate of Merger by the
Secretary of State of the State of Illinois the merger herein contemplated shall
become effective.
<PAGE>
- 8 -
ARTICLE VIII
This Agreement and the merger contemplated herein may be terminated and
abandoned at any time prior to the filing of articles of merger with the
Secretary of State of Illinois or the filing of this Agreement with the
Secretary of State of Delaware by the Board of Directors of either of the
Constituent Corporations notwithstanding approval of this Agreement by the
stockholder of Peoples Delaware and the shareholder of Peoples Illinois.
ARTICLE IX
For accounting purposes, the merger shall be treated as a pooling of
interests. On the effective date of the merger entry shall be made upon the
books of the Surviving Corporation as follows:
(a) The assets and liabilities of Peoples Delaware shall be recorded in
the books of account in the amount at which they are carried on the books of
Peoples Delaware immediately prior to the effective date of the merger;
(b) The aggregate amount of the net assets of each of the Constituent
Corporations available for payment of dividends immediately prior to the merger
shall continue to be available for the payment of dividends by the Surviving
Corporation; and
(c) There shall be made such other appropriate entries, consistent with
generally accepted accounting principles, as may be required.
<PAGE>
- 9 -
ARTICLE X
All notices, waivers, consents or requests hereunder shall be in writing
and shall be deemed to have been duly given if delivered, or sent by certified
mail, to
(a) Peoples Gas Company
122 South Michigan Avenue
Chicago, Illinois 60603
(b) Peoples Gas Company (Delaware)
122 South Michigan Avenue
Chicago, Illinois 60603
ARTICLE XI
At any time before or after approval and adoption by the respective
shareholder or stockholder, as the case may be, of the Constituent Corporations,
this Agreement may be amended in matters of form, or supplemented by additional
agreements, articles or certificates, as may be determined in the judgment of
the appropriate officers or the Boards of Directors of the Constituent
Corporations to be necessary, desirable or expedient to clarify the intention of
the parties hereto or to effect or facilitate the filing, recording or official
approval of any documents required for the consummation hereof in accordance
with the purpose and intent of this Agreement.
<PAGE>
- 10 -
ARTICLE XII
1. Copies of all documents and written disclosures delivered by either of
the Constituent Corporations to the other in accordance with the terms of this
Agreement shall be initialed and retained by both Constituent Corporations.
2. For the convenience of the parties and to facilitate the filing and
recording of this Agreement, any number of counterparts hereof may be executed
and each such executed counterpart shall constitute one and the same instrument.
IN WITNESS WHEREOF, these presents have been signed by the duly authorized
officers of Peoples Illinois and Peoples Delaware and the Corporate seal of each
has been hereunto affixed, all as of the day and year first above written.
<PAGE>
- 11 -
PEOPLES GAS COMPANY
By /s/R. M. Davis
--------------
Executive Vice President
ATTEST:
/s/J. M. Wells
- --------------
Secretary
PEOPLES GAS COMPANY
(DELAWARE)
By /s/J. M. Wells
--------------
Vice President
ATTEST:
/s/William J. Morrow
- --------------------
Assistant Secretary
<PAGE>
- 12 -
STATE OF ILLINOIS )
) ss.
COUNTY OF COOK )
BE IT REMEMBERED, that on this 7th day of December, 1967, personally came
before me /s/Mary L. Forsberg, a Notary Public in and for the County and State
aforesaid, JOSEPH M. WELLS, Vice President of Peoples Gas Company (Delaware), a
Delaware corporation, and ROBERT M. DREVS, Executive Vice President of Peoples
Gas Company, an Illinois corporation, parties to the foregoing Agreement and
Plan of Merger, known to me personally to be such, and severally acknowledged
the said Agreement and Plan of Merger to be the act and deed of the signers
respectively, and that the facts therein stated are true.
GIVEN under my hand and Seal of Office the day and year aforesaid.
/s/Mary L. Forsberg
-------------------
<PAGE>
- 13 -
SECRETARY'S CERTIFICATE
The undersigned, JOSEPH M. WELLS, Secretary of Peoples Gas Company
(Delaware), one of the merging corporations mentioned in the within Agreement,
on behalf of said corporation, certifies as follows:
The within Agreement has been consented to in writing by the holder of all
of the outstanding stock of the corporation entitled to vote on a merger.
IN WITNESS WHEREOF, the undersigned hereby certifies to the foregoing under
the corporate seal of the corporation.
/s/J. M. Wells
--------------
Secretary of
Peoples Gas Company (Delaware)
(CORPORATE SEAL)
<PAGE>
- 14 -
SECRETARY'S CERTIFICATE
The undersigned, JOSEPH M. WELLS, Secretary of Peoples Gas Company, one of
the merging corporations mentioned in the within Agreement, on behalf of said
corporation certifies as follows:
The within Agreement has been consented to in writing by the holder of all
of the outstanding shares of the corporation entitled to vote on a merger.
IN WITNESS WHEREOF, the undersigned hereby certifies to the foregoing under
the corporate seal of the corporation.
/s/J. M. Wells
--------------
Secretary of
Peoples Gas Company
(CORPORATE SEAL)
<PAGE>
- 15 -
The foregoing Agreement and Plan of Merger, having been duly entered into
and signed by Peoples Gas Company (Delaware), a Delaware corporation, and having
been duly entered into and signed by Peoples Gas Company, an Illinois
corporation, and having been duly adopted by the stockholder and shareholder, as
the case may be, of each of such corporations, all in accordance with the
provisions of the General Corporation Law of the State of Delaware and the
Business Corporation Act of the State of Illinois, the Vice President of Peoples
Gas Company (Delaware) and the Vice President of Peoples Gas Company do now
hereby execute said Agreement and Plan of Merger under the corporate seals of
their respective corporations by authority of the directors and stockholders of
each, as the respective act, deed and agreement of each of said corporations, on
this 7th day of February, 1968.
PEOPLES GAS COMPANY (DELAWARE)
By /s/J. M. Wells
--------------
Vice President
ATTEST:
/s/W. M. Morrow
- ---------------
Assistant Secretary
PEOPLES GAS COMPANY
By /s/R. M. Drevs
--------------
Vice President
ATTEST:
/s/J. M. Wells
- --------------
Secretary
<PAGE>
- 16 -
STATE OF ILLINOIS )
) ss
COUNTY OF COOK )
BE IT REMEMBERED, that on this 7th day of February, 1968, personally came
before me, /s/Mary L. Forsberg, a Notary Public in and for the County and State
aforesaid, JOSEPH M. WELLS, Vice President of Peoples Gas Company (Delaware), a
Delaware corporation, and ROBERT M. DREVS, Vice President of Peoples Gas
Company, an Illinois corporation, parties to the foregoing Agreement and Plan of
Merger, known to me personally to be such, and severally acknowledged the said
Agreement and Plan of Merger to be the act and deed of the signers respectively,
and that the facts therein stated are true.
Given under my hand and seal of office the day and year aforesaid.
/s/Mary L. Forsberg
----------------
<PAGE>
IN WITNESS WHEREOF each of the undersigned corporations has caused these
articles of merger to be executed in its name by its vice president and its
corporate seal to be hereunto affixed, attested by its secretary or assistant
secretary, this 7th day of February , 1968
PEOPLES GAS COMPANY
-------------------
Place
(Corporate Seal)
Here
By /s/R. M. Drevs
--------------
Its Vice President
ATTEST:
/s/J. M. Wells
- --------------
Its Secretary
Place PEOPLES GAS COMPANY (DELAWARE)
(Corporate Seal) ------------------------------
Here
By /s/J. M. Wells
--------------
Its Vice President
ATTEST:
/s/W. M. Morrow
- ---------------
Its Assistant Secretary
(over)
<PAGE>
STATE OF ILLINOIS )
COUNTY OF COOK )ss.
I, /s/Mary L. Forsberg, a Notary Public, do hereby certify that on the 7th
day of February, A.D. 1968, personally appeared before me ROBERT M. DREVS, who
declares that he is the Vice President of PEOPLES GAS COMPANY, one of the
corporations executing the foregoing documents, and being first duly sworn,
acknowledged that he signed the foregoing articles of merger in the capacity
therein set forth and declared that the statements therein contained are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year
before written.
Place /s/Mary L. Forsberg
(Notarial Seal) -------------------
Here Notary Public
STATE OF ILLINOIS )
COUNTY OF COOK )ss.
I, /s/Mary L. Forsberg, a Notary Public, do hereby certify that on the 7th
day of February, A.D. 1968, personally appeared before me JOSEPH M. WELLS, who
declares that he is the Vice President of PEOPLES GAS COMPANY (DELAWARE), one of
the corporations executing the foregoing documents, and being first duly sworn,
acknowledged that he signed the foregoing articles of merger in the capacity
therein set forth and declared that the statements therein contained are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year
before written.
Place /s/Mary L. Forsberg
(Notarial Seal) -------------------
Here Notary Public
Form F-D
Box 4791 File 313
ARTICLES OF
MERGER
CONSOLIDATION
OF
PEOPLES GAS COMPANY
and
PEOPLES GAS COMPANY (DELAWARE)
FILED
FEB 15 1968
/s/Paul Powell
Secretary of State
(File in Duplicate)
Filing Fee $20.00
<PAGE>
Certificate Number 8806
STATE OF ILLINOIS
OFFICE OF
THE SECRETARY OF STATE
To all to whom these Presents Shall Come, Greeting:
Whereas, Articles of amendment to the Articles of Incorporation duly signed and
verified of PEOPLES GAS COMPANY have been filed in the Office of the Secretary
of State on the 5th day of February A.D. 1969, as provided by "THE BUSINESS
CORPORATION ACT" of Illinois, in force July 13, A.D. 1933.
Now Therefore, I, PAUL POWELL, Secretary of State of the State of Illinois, by
virtue of the powers vested in me by law, do hereby issue this certificate of
amendment and attach thereto a copy of the Articles of Amendment to the Articles
of Incorporation of the aforesaid corporation.
In Testimony Whereof, I hereto set my hand and
cause to be affixed the Great Seal of the State of
Illinois, Done at the City of Springfield this 5th day
of February A.D. 1969 and of the Independence of the
United States the one hundred and 93rd.
(SEAL)
/s/Paul Powell
--------------
Secretary of State.
<PAGE>
FORM BCA 55
(Do not write in this space)
Date Paid 2-5-69
(File in Duplicate)
License Fee $
Franchise Tax $
Filing Fee $25.00
Clerk GP
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
PEOPLES GAS COMPANY
-------------------
(Exact Corporate Name)
To PAUL POWELL,
Secretary of State
Springfield, Illinois
The undersigned corporation, for the purpose of amending its Articles of
Incorporation and pursuant to the provisions of Section 55 of "The Business
Corporation Act" of the State of Illinois, hereby executes the following
Articles of Amendment:
ARTICLE FIRST: The name of the corporation is:
Peoples Gas Company
ARTICLE SECOND: The following amendment or amendments were adopted in the
manner prescribed by "The Business Corporation Act" of the State of Illinois:
Paragraph 1 and Paragraph 2 of Article Five of the Articles of Incorporation of
this Company are amended and as amended shall read as follows:
"Article Five"
"Paragraph 1: The aggregate number of shares which the corporation is
authorized to issue is 30,000,000 divided into one (1) class. The designation
of each class, the number of shares of each class and the par value, if any, of
the shares of each class, or a statement that the shares of any class are
without par value, are as follows:
<TABLE>
<CAPTION>
Par Value Per
Share Or
Statement That
Series Number Of Shares Are
Class (If Any) Shares Without Par Value
----- -------- ----------- -----------------
<S> <C> <C> <C>
Common None 30,000,000 Without Par Value"
</TABLE>
<PAGE>
"Paragraph 2: The preferences, qualifications, limitations, restrictions and
the special or relative rights in respect of the shares of each class are: No
holder of any shares of the corporation shall have any preemptive right to
subscribe for, or acquire any shares of any class or other security of any kind
of the corporation, either now or hereafter authorized."
(Disregard separation into ARTICLE THIRD: The number of shares of the
classes if class voting does corporation outstanding at the time of the
not apply to the amendment adoption of said amendment or amendments was voted
on.) 15,926,633; and the number of shares of each
class entitled to vote as a class on the adoption
of said amendment or amendments, and the
designation of each such class were as follows:
Class Number of Shares
Class voting not applicable
(Disregard separation into ARTICLE FOURTH: The number of shares voted for
classes if class voting said amendment or amendments was Paragraph 1 -
does not apply to the 13,605,955 and Paragraph 2 - 12,711,724; and the
amendment voted on) number of shares voted against said amendment or
amendments was Paragraph 1 - 245,406 and Paragraph
2 - 715,071. The number of shares of each class
entitled to vote as a class voted for and against
said amendment or amendments, respectively, was:
Class Number of Shares Voted
Class voting not
applicable For Against
(Disregard these items Item 1. On the date of the adoption of this
unless the amendment amendment,restating the articles of
restates the articles of incorporation, the corporation had
incorporation.) _________ shares issued, itemized as follows:
Class Series Number of Par value per share or
(If Any) Shares statement that shares
are without par value
Not applicable
Item 2. On the date of the adoption of this
amendment restating the articles of incorporation,
the corporation had a stated capital of $_________
and a paid-in surplus of $ _________ or a total of
$_________.
Not Applicable
<PAGE>
(Disregard separation into ARTICLE THIRD: The number of shares of the
classes if class voting does corporation outstanding at the time of the
not apply to the amendment adoption of said amendment or amendments was
voted on.) 26,110,829*; and the number of shares of each
class entitled to vote as a class on the
adoption of said amendment or amendments, and
the designation of each such class were as
follows:
Class Number of Shares
Not Applicable
*Excludes 22,646 non-voting treasury shares
(Disregard separation into ARTICLE FOURTH: The number of shares voted
classes if class voting does for said amendment or amendments was
not apply to the amendment 20,427,766; and the number of shares voted
voted on.) against said amendment or amendments
was 1,157,296. The number of shares of each
class entitled to vote as a class voted for and
against said amendment or amendments,
respectively, was:
Class Number of Shares Voted
For Against
Not Applicable
(Disregard these items unless Item 1. On the date of the adoption of this the
amendment restates the amendment, restating the articles of
articles of incorporation.) incorporation, the corporation had_____shares
issued, itemized as follows:
Par value per share
or statement
Class Series Number of that shares are
(If Any) Shares without par value
Not Applicable
Item 2. On the date of the adoption of this
amendment restating the articles of
incorporation, the corporation had a stated
capital of $__and a paid-in surplus of $__or a
total of $__.
Not Applicable.
<PAGE>
(Disregard this Article where ARTICLE FIFTH: The manner in which the
this amendment contains exchange, reclassification, or cancellation
no such provisions.) of issued shares, or a reduction of the
number of authorized shares of any class
below the number of issued shares of that
class, provided for in, or effected by, this
amendment, is as follows:
Not Applicable.
(Disregard this Paragraph ARTICLE SIXTH: Paragraph 1: The manner in
where amendment does which said amendment or amendments effect a not
affect stated capital change in the amount of stated capital or the or
paid-in surplus.) amount of paid-in surplus, or both, is as
follows:
Not Applicable
(Disregard this Paragraph Paragraph 2: The amounts of stated capital
where amendment does and of paid-in surplus as changed by this
not affect stated capital amendment are as follows:
or paid-in surplus.)
Before Amendment After Amendment
Stated capital $ $
Paid-in surplus $ $
Not Applicable.
<PAGE>
IN WITNESS WHEREOF, the undersigned corporation
has caused these Articles of Amendment to be
executed in its name by its Vice President, and
its corporate seal to be hereto affixed,
attested by its Assistant Secretary, this 2nd
day of February, 1978.
Peoples Gas Company
-------------------
Place (Exact Corporate Name)
(CORPORATE SEAL)
Here By /s/William C. Terpstra
----------------------
Its Vice President
ATTEST:
/s/D. G. Holm
-------------
Its Assistant Secretary
STATE OF Illinois }
--------
COUNTY OF Cook}ss.
----
I, Rita Thomas, a Notary Public, do hereby certify that on the 2nd day of
February 1978, William C. Terpstra personally appeared before me and, being
first duly sworn by me, acknowledged that he signed the foregoing document in
the capacity therein set forth and declared that the statements therein
contained are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year
before written.
Place /s/Rita Thomas
(NOTARIAL SEAL) --------------
Here Notary Public
My Commission Expires
June 30, 1980
Form BCA-55
Box 4791 File 313-6
ARTICLES OF AMENDMENT F I L E D
to the FEB 15 1978
/s/Alan J. Dixon
ARTICLES OF INCORPORATION Secretary of State
of FILE IN DUPLICATE
Filing Fee $25.00
Filing Fee for Re-Stated Articles $100.00
- -------------------------
<PAGE>
FORM BCA-55
(Do not write in this space)
Date Paid 2-15-78
License Fee $
Franchise Tax $
Filing Fee $25.00
Clerk GP
(File in Duplicate)
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
PEOPLES GAS COMPANY
-------------------
(Exact Corporate Name)
To ALAN J. DIXON
Secretary of State
Springfield, Illinois
The undersigned corporation, for the purpose of amending its Articles of
Incorporation and pursuant to the provisions of Section 55 of "The Business
Corporation Act" of the State of Illinois, hereby executes the following
Articles of Amendment:
ARTICLE FIRST: The name of the corporation is:
PEOPLES GAS COMPANY
ARTICLE SECOND: The following amendment or amendments were adopted in the
manner prescribed by "The Business Corporation Act" of the State of Illinois:
Paragraph 1 of Article Five of the Articles of Incorporation is amended to
read as follows:
PARAGRAPH 1: The aggregate number of shares which the corporation is
authorized to issue is 65,000,000, divided into two classes. The designation of
each class, the number of shares of each class, and the par value, if any, of
the shares of each class, or a statement that the shares of any class are
without par value, are as follows:
<TABLE>
<CAPTION>
Par Value Per Share
or Statement That
Series Number Shares are Without
Class (If Any) of Shares Par Value
----- -------- --------- -------------------
<S> <C> <C> <C>
Common None 60,000,000 Without par value
Preferred (see Paragraph 2) 5,000,000 Without par value
</TABLE>
<PAGE>
Certificate 37832
STATE OF ILLINOIS
OFFICE OF
THE SECRETARY OF STATE
To all to whom These Presents Shall Come, Greeting:
Whereas, Articles of amendment to the Articles of Incorporation duly signed and
verified of PEOPLES GAS COMPANY have been filed in the Office of the Secretary
of State on the 1st day of February A.D. 1980, as provided by "THE BUSINESS
CORPORATION ACT" of Illinois, inforce July 13, A.D. 1933.
Now Therefore, I, ALAN J. DIXON, Secretary of State of the State of Illinois, by
virtue of the powers vested in me by law, do hereby issue this certificate of
amendment and attach thereto a copy of the Articles of Amendment to the Articles
of Incorporation of the aforesaid corporation.
In Testimony Whereof, I hereto set my hand and cause to be affixed the
Great Seal of the State of Illinois, Done at the City of Springfield this 1st
day of February A.D. 1980 and of
the Independence of the United States the two hundred and 4th.
(SEAL) /s/Alan J. Dixon
Secretary of State
<PAGE>
FORM BCA-55
(Do not write in this space)
Date Paid 2-1-80
License Fee $
Franchise Tax $
Filing Fee $25.00
Clerk C
(File in Duplicate)
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
PEOPLES GAS COMPANY
-------------------
(Exact Corporate Name)
To ALAN J. DIXON
-------------
Secretary of State
Springfield, Illinois
The undersigned corporation, for the purpose of amending its Articles of
Incorporation and pursuant to the provisions of Section 55 of "The Business
Corporation Act" of the State of Illinois, hereby executes the following
Articles of Amendment:
ARTICLE FIRST: The name of the corporation is:
PEOPLES GAS COMPANY
ARTICLE SECOND: The following amendment or amendments were adopted in the
manner prescribed by "The Business Corporation Act" of the State of Illinois:
Item 1. Article First of the Articles of Incorporation is amended by
deleting the same and substituting in lieu thereof the following:
"ARTICLE FIRST: The name of the corporation is:
Peoples Energy Corporation"
Item 2. The Articles of Incorporation are further amended by adding
thereto the following provision:
"The Board of Directors of the Company may, by action of a majority of
Directors then in office, fill one or more vacancies arising between meetings of
shareholders by reason of an increase in the number of Directors or for other
reasons. At no time may the number of Directors selected to fill vacancies in
this manner during any interim period between meetings of shareholders exceed
one-third of the total membership of the Board of Directors. A director elected
to fill a vacancy shall serve until the next annual meeting of shareholders."
<PAGE>
(Disregard separation into ARTICLE THIRD: The number of shares of the
classes if class voting corporation outstanding at the time of the
does not apply to the adoption of said amendment or amendments was
amendment voted on.) 26,899,341*; and the number of shares of
each class entitled to vote as a class on the
adoption of said amendment or amendments, and
the designation of each such class were as
follows:
Class Number of Shares
Common Stock
Not Applicable
*Excludes 18,136 Non-Voting treasury shares
(Disregard separation into ARTICLE FOURTH: The number of shares voted for
classes if class voting said amendment or amendments was Item 1.
does not apply to the 21,692,458 Item 2. 21,035,609; and the number
amendment voted on.) of shares voted against said amendment or
amendments was Item 1. 753,532 Item 2. 513,668.
The number of shares of each class entitled to
vote as a class voted for and against said
amendment or amendments, respectively, was:
CLASS NUMBER OF SHARES VOTED
FOR AGAINST
Not Applicable
(Disregard these items Item 1. On the date of the adoption of this
unless the amendment amendment, restating the articles of
restates the articles of incorporation, the corporation had ______shares
incorporation.) issued, itemized as follows:
Class Series Number of Par value per share or
(If Any) Shares statement that shares
are without par value
Not Applicable
Item 2. On the date of the adoption of this
amendment restating the articles of
incorporation, the corporation had a stated
capital of $__________ and a paid-in surplus of
$__________ or a total of $__________.
Not Applicable.
<PAGE>
(Disregard this Article ARTICLE FIFTH: The manner in which the
where this amendment exchange, reclassification, or cancellation of
contains no such issued shares, or a reduction of the number of
provisions.) authorized shares of any class below the number
of issued shares of that class, provided for in,
or effected by, this amendment, is as follows:
Not Applicable.
(Disregard this Paragraph ARTICLE SIXTH: Paragraph 1: The manner in
where amendment does which said amendment or amendments effect a
not affect stated capital change in the amount of stated capital or the
or paid-in surplus.) amount of paid-in surplus, or both, is as
follows:
Not Applicable.
(Disregard this Paragraph Paragraph 2: The amounts of stated capital and
where amendment does of paid-in surplus as changed by this amendment
not affect stated capital are as follows:
or paid-in surplus.) Before Amendment After Amendment
Stated capital .$ $
Paid-in surplus.$ $
Not Applicable.
<PAGE>
IN WITNESS WHEREOF, the undersigned corporation has caused these Articles
of Amendment to be executed in its name by its Vice President, and its corporate
seal to be hereto affixed, attested by its Assistant Secretary, this 31st day of
January, 1980.
Peoples Gas Company
-------------------
(Exact Corporate Name)
Place By /s/C.G. Freund
(CORPORATE SEAL) --------------
Here Its Vice President
ATTEST:
/s/D. G. Holm
- --------------
Its Assistant Secretary
STATE OF ILLINOIS }
COUNTY OF COOK } ss.
I, Rita Thomas, a Notary Public, do hereby certify that on the 31st day of
January 1980, C. G. Freund personally appeared before me and, being first duly
sworn by me, acknowledged that he signed the foregoing document in the capacity
therein set forth and declared that the statements therein contained are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year
before written.
Place /s/Rita Thomas
(NOTARIAL SEAL) --------------
Here Notary Public
My Commission Expires
June 30, 1980
Form BCA-55
Box 4791 File 313-6
ARTICLES OF AMENDMENT FI L E D
to the FEB 1 1980
FILE IN DUPLICATE
ARTICLES OF INCORPORATION Filing Fee $25.00
of
PEOPLES GAS COMPANY Filing Fee for Re-Stated Articles $100.00
<PAGE>
(Disregard this Article where ARTICLE FIFTH: The manner in which the
This amendment contains exchange, reclassification, or cancellation
no such provisions.) of issued shares, or a reduction of the
number of authorized shares of any class
below the number of issued shares of that
class, provided for in, or effected by, this
amendment, is as follows:
Not Applicable
(Disregard this Paragraph ARTICLE SIXTH: Paragraph 1: The manner
where amendment in which said amendment or amendments effect
does not affect stated a change in the amount of stated capital or
capital or paid-in surplus.) the amount of paid-in surplus, or both, is as
follows:
Not Applicable
(Disregard this Paragraph Paragraph 2: The amounts of stated capital and of
where amendment does paid-in surplus as changed by this amendment are
not affect stated capital as follows:
or paid-in surplus.) Before Amendment After Amendment
Stated capital. .$ $
Paid-in surplus .$ $
Not Applicable
<PAGE>
IN WITNESS WHEREOF, the undersigned corporation has caused these Articles
of Amendment to be executed in its name by its_______President, and its
corporate seal to be hereto affixed, attested by its___________Secretary, this
4th day of February, 1969.
PEOPLES GAS COMPANY
-------------------
(Exact Corporate Name)
PLACE
(CORPORATE SEAL)
HERE By /s/Remick McDowell
---------------------
ATTEST: Its President
/s/J. M. Wells
- ---------------------
Its Secretary
STATE OF ILLINOIS}
}ss.
COUNTY OF COOK }
I, Philip B. Hill, a Notary Public, do hereby certify that on the 4th
day of February 1969, Remick McDowell personally appeared before me and, being
first duly sworn by me, acknowledged that he signed the foregoing document in
the capacity therein set forth and declared that the statements therein
contained are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and
year before written.
/s/Philip B. Hill
-----------------
Notary Public
PLACE
(NOTARIAL SEAL)
HERE
Form BCA-55
Box 4791 File 313
ARTICLES OF AMENDMENT
to the
ARTICLES OF INCORPORATION
of
PEOPLES GAS COMPANY
FILED February 5, 1969
/s/Paul Powell
Secretary of State
FILE IN DUPLICATE
Filing Fee $25.00
Filing Fee for Re-Stated Articles $100.00
<PAGE>
Certificate Number 11194
STATE OF ILLINOIS
OFFICE OF
THE SECRETARY OF STATE
To all to whom these Presents Shall Come, Greeting:
Whereas, Articles of amendment to the Articles of Incorporation duly signed and
verified of Peoples Gas Company have been filed in the Office of the Secretary
of State on the 5th day of February A.D. 1970, as provided by "THE BUSINESS
CORPORATION ACT" of Illinois, in force July 13, 1933.
Now Therefore, I PAUL POWELL, Secretary of State of the State of Illinois by
virtue of the powers vested in me by law, do hereby issue this certificate of
amendment and attach thereto a copy of the Articles of Amendment to the Articles
of Incorporation of the aforesaid corporation.
In Testimony Whereof, I hereto set my hand and cause to
be affixed the Great Seal of the State of Illinois,
(SEAL) Done at the City of Springfield this 5th day of
February A.D. 1970 and of the Independence of the
United States the one hundred and 94th.
/s/Paul Powell
--------------
SECRETARY OF STATE
<PAGE>
Form BCA-55
---------------------------
(Do not write in this space)
Date Paid 02-05-70
License Fee $
Franchise Tax $
(File in Duplicate) Filing Fee $25.00
Clerk GP
--------------------------
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
PEOPLES GAS COMPANY
(Exact Corporate Name)
To PAUL POWELL,
Secretary of State
Springfield, Illinois
The undersigned corporation, for the purpose of amending its Articles of
Incorporation and pursuant to the provisions of Section 55 of "The Business
Corporation Act" of the State of Illinois, hereby executes the following
Articles of Amendment:
ARTICLE FIRST: The name of the corporation is: PAID
FEB 5 1970
PEOPLES GAS COMPANY
/s/Paul Powell
--------------
Secretary of
State
ARTICLE SECOND: The following amendment or amendments were adopted in the
manner prescribed by "The Business Corporation Act" of the State of Illinois:
<PAGE>
Article Five of the Articles of Incorporation of Peoples Gas Company is amended
to read as follows:
"ARTICLE FIVE
"PARAGRAPH 1: The aggregate number of shares which the corporation is
authorized to issue is 35,000,000, divided into two classes. The designation of
each class, the number of shares of each class, and the par value, if any, of
the shares of each class, or a statement that the shares of any class are
without par value, are a follows:
Par Value Per Share
or Statement That
Series Number Shares are Without
Class (If Any) of Shares Par Value
----- -------- --------- -------------------
Common None 30,000,000 Without par value
Preferred [See Paragraph 2] 5,000,000 Without par value
"PARAGRAPH 2: The preferences, qualifications, limitations, restrictions and
the special or relative rights in respect of the shares of each class are:
"Authority is hereby expressly vested in the Board of Directors to divide,
and to provide for the issue from time to time of the preferred shares in one or
more series, and in connection with the creation of any such series to fix by
the resolution or resolutions providing for the issue of shares thereof the
desingnation, powers, preferences, and relative, participating, optional, or
other special rights of such series, and the qualifications, limitations, or
restrictions thereof, to the full extent now or hereafter permitted by law and
not inconsistent with the provisions hereof, provided that all preferred shares
shall be identical except as to the following relative rights and preferences,
in respect of any or all of which there may be variations between different
series: (1) the rate of dividend; (2) the price at and the terms and conditions
on which shares may be redeemed; (3) the amount payable upon shares in event of
involuntary liquidation; (4) the amount payable upon shares in event of
voluntary liquidation; (5) sinking fund provisions for the redemption or
purchase of shares, provided that provision for a sinking fund at least as
beneficial to all issued and outstanding shares of the same class shall either
then exist or be at the same time created; and (6) the terms and conditions on
which shares may be converted, if the shares of any series are issued with the
privilege of conversion into common shares of this corporation.
"In the event of any liquidation, dissolution, or winding up of the
corporation or upon the distribution of the assets of the corporation, all
assets and funds of the corporation remaining, after the payment to the holders
of the preferred shares of the full preferential amounts to which they shall be
entitled as provided in the resolution or resolutions creating any series
thereof, shall be divided and distributed among the holders of the common shares
ratably, except as may otherwise be provided in any such resolution or
resolutions. Neither the merger or consolidation of the corporation with
another corporation nor the sale or lease of all or substantially all the assets
of the corporation shall be deemed to be a liquidation, dissolution, or winding
up of the corporation or a distribution of its assets.
"Shares of the corporation may be issued from time to time for such
consideration as from time to time may be fixed by the Board of Directors. No
holder of any shares of the corporation shall have any preemptive right to
subscribe for, or acquire any shares of any class or other security of any kind
of the corporation, either now or hereafter authorized."
<PAGE>
(Disregard separation into ARTICLE THIRD: The number of shares of
classes if class voting does the corporation outstanding at the time of
not apply to the amendment the adoption of said amendment or amendments
voted on.) was 15,965,281*; and the number of shares of
each class entitled to vote as a class on the
adoption of said amendment or amendments, and
the designation of each such class were as
follows:
Class Number of Shares
* Excludes 5,531 shares held in treasury.
Total shares issued is 15,970,812
(Disregard separation into ARTICLE FOURTH: The number of shares
classes if class voting does voted for said amendment or amendments was
not apply to the amendment 12,651,101; and the number of shares voted
voted on.) against said amendment or amendments was
565,797. The number of shares of each class
entitled to vote as a class voted for and
against said amendment or amendments
respectively, was:
Class Number of Shares Voted
For Against
Not Applicable
(Disregard these items unless Item 1. On the date of the adoption of this
the amendment restates the amendment, restating the articles of
articles of incorporation.) incorporation, the corporation had___shares
issued, itemized as follows:
Class Series Number of Par value per share or
(If Any) Shares statement that shares
are without par value
Not Applicable
<PAGE>
Item 2. On the date of the adoption of this
amendment restating the articles of
incorpation, the corporation had a stated
capital of $________ and a paid-in surplus of
$______ or a total of $_______.
Not applicable
(Disregard this Article ARTICLE FIFTH: The manner in which the
where this amendment exchange, reclassification, or cancellation
contains no such of issued shares, or a reduction of the
provisions.) number of authorized shares of any class
below the number of issued shares of that
class, provided for in, or effected by, this
amendment, is as follows:
Not applicable
(Disregard this Paragraph ARTICLE SIXTH: Paragraph 1: The manner
where amendment does not in which said amendment or amendments effect
affect stated capital or a change in the amount of stated capital or
paid-in surplus.) the amount of paid-in surplus, or both, is
as follows:
Not applicable
(Disregard this Paragraph Paragraph 2: The amounts of stated capital
where amendment does not and of paid-in surplus as changed by this
affect stated capital or amendment are as follows:
paid-in surplus.)
Before Amendment After Amendment
Stated Capital . $ $
Paid-in surplus. $ $
Not applicable
<PAGE>
IN WITNESS WHEREOF, the undersigned corporation has caused these Articles
of Amendment to be executed in its name by its___President, and its corporate
seal to be hereto affixed, attested by its_________Secretary, this 2nd day of
February, 1970.
PEOPLES GAS COMPANY
-------------------
(Exact Corporate Name)
PLACE
(CORPORATE SEAL) BY /s/Robert M. Drevs
HERE ------------------
Its President
ATTEST:
/s/C. G. Freund
- ---------------
Its Secretary
STATE OF ILLINOIS }
COUNTY OF COOK }ss.
I, Cynthia M. Bock, a Notary Public, do hereby certify that on the 2nd day
of February 1970, Robert M. Drevs personally appeared before me and, being first
duly sworn by me, acknowledged that he signed the foregoing document in the
capacity therein set forth and declared that the statements therein contained
are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year
before written.
/s/Cynthia M. Bock
------------------
Notary Public
PLACE
(NOTARIAL SEAL)
HERE
Form BCA-55
Box 4791 File 313-6
ARTICLES OF AMENDMENT
to the
ARTICLES OF INCORPORATION
of
PEOPLES GAS COMPANY
FILED February 5, 1970
PAUL POWELL
Secretary of State
FILE IN DUPLICATE
Filing Fee $25.00
Filing Fee for Re-Stated Articles $100.00
<PAGE>
Certificate Number 80758
STATE OF ILLINOIS
OFFICE OF
THE SECRETARY OF STATE
To all to whom these Presents Shall Come, Greeting:
Whereas, Articles of amendment to the Articles of Incorporation duly signed and
verified of Peoples Gas Company have been filed in the Office of the Secretary
of State on the 15th day of February A.D. 1978, as provided by "THE BUSINESS
CORPORATION ACT" of Illinois, in force July 13, A.D. 1933.
Now Therefore, I, ALAN J. DIXON, Secretary of State of the State of Illinois, by
virtue of the powers vested in me by law, do hereby issue this certificate of
amendment and attach thereto a copy of the Articles of Amendment to the Articles
of Incorporation of the aforesaid corporation.
In Testimony Whereof, I hereto set my hand and
cause to be affixed the Great Seal of the State of
(SEAL) Illinois, Done at the City of Springfield this
15th day of February A.D. 1978 and of the
Independence of the United States the two
hundred and 2nd.
/s/Alan J. Dixon
----------------
SECRETARY OF STATE
<PAGE>
RETURN TO: STATE OF ILLINOIS CORPORATION
Corporation Department DOMESTIC CORPORATION ANNUAL REPORT FILE NO.
Secretary of State D 4791-313-6
Springfield, IL. 62756
Telephone (217) 782-7808 YEAR OF 1989 FILED
89440840 051789 JUL 20 1989
PEOPLES ENERGY CORPORATION COOK
1.) % J BRUCE HASCH
CORPORATE NAME 122 S MICHIGAN AVE
REGISTERED AGENT CHICAGO, IL. 60603
REGISTERED OFFICE SECRETARY OF STATE
CITY, IL, ZIP CODE 2.) AGENT/OFFICE CHANGES ONLY (SEE 11h)
PEOPLES ENERGY CORPORATION
--------------------------
Corporation Name
J. Bruce Hasch
--------------------------------
3.) Date Incorporated 08/03/1967 Registered Agent
Give complete address of principal 122 S. Michigan Ave. Room 248
office, if other than above: --------------------------------
Registered Office-Street Address
Chicago, IL 60603-6107
--------------------------------
City, County, IL Zip Code
Federal Employer Identification Number
(FEIN) * 362642766
4.) The names and addresses of the officers and directors are: (If officers are
directors, so state.)
NAME OFFICE NUMBER & STREET CITY STATE ZIP
- --------------------------------------------------------------------------------
President
- --------------------------------------------------------------------------------
Secretary SEE ATTACHED SCHEDULE
- --------------------------------------------------------------------------------
Treasurer
- --------------------------------------------------------------------------------
Director
- --------------------------------------------------------------------------------
Director
- --------------------------------------------------------------------------------
Director
- --------------------------------------------------------------------------------
5.) The type of business actually conducted in Illinois is: Holding and
Investment Company
6.) Number of shares authorized and issued (as of 05/31/89)
CLASS SERIES PAR VALUE NUMBER AUTHORIZED NUMBER ISSUED
- ------------------------------------------------------------------------------
COMM NPV 60000000 32,610,575.000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
7a.) The amount of paid-in capital as of 05/31/89 7b.) The Paid-in Capital as of 05/31/89
is: on record with the Secretary of State is:
*PAID-IN CAPITAL $231,290,912 TOTAL $ 230,941,810
------------ ----------------------------------------
*"Paid-in Capital" replaces the terms (The figure in Item 7b may not be altered.)
Stated Capital and Paid-in Surplus.
It does not include Retained Earnings.
</TABLE>
<TABLE>
ITEM 8 MUST BE SIGNED
<S> <C>
8.) By /s/G. G. Henning Vice President 7/14/89 Under the penalty of perjury and as an authorized officer,
------------------------------------------------------------- I declare that this annual report and, if applicable, the
(Any Authorized Officer's Signature) (Title) (Date) statement of change of registered agent and/or office,
(Pres. or V. Pres. REQUIRED if changes listed in 2)
Attest /s/James G. Boie Assistant Secretary 7/14/89 pursuant to provisions of the Business Corporation Act,
---------------------------------------------------------------- has been examined by me and is, to the best of my know-
(Secretary's or ass't. Secretary's Signature (Title) (Date) ledge and belief, true, correct, and complete.
required ONLY if changes listed in 2)
</TABLE>
<PAGE>
File Number 4791-313-6
STATE OF ILLINOIS
OFFICE OF
THE SECRETARY OF STATE
Whereas, ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF
PEOPLES ENERGY CORPORATION
INCORPORATED UNDER THE LAWS OF THE STATE OF ILLINOIS HAVE BEEN FILED IN THE
OFFICE OF THE SECRETARY OF STATE AS PROVIDED BY THE BUSINESS CORPORATION ACT OF
ILLINOIS, IN FORCE JULY 1, A.D. 1984.
Now, Therefore, I, George H. Ryan, Secretary of State of the State of Illinois,
by virtue of the powers vested in me by law, do hereby issue this certificate
and attach hereto a copy of the Application of the aforesaid corporation.
In Testimony Whereof, I hereto set my hand and cause to be affixed the
Great Seal of the State of Illinois, at the City of Springfield, this 3rd day of
March A.D. 1995 and of the Independence of the United States the two hundred and
19th.
/s/George H. Ryan
(SEAL) Secretary of State
<PAGE>
FORM BCA-10.30 ARTICLES OF AMENDMENT File #4791-313-6
- --------------------------------------------------------------------------------
(Rev. Jan. 1995)
- --------------------------------------------------------------------------------
George H. Ryan SUBMIT IN DUPLICATE
Secretary of State This space for use by
Department of Business Secretary of State
Services
Springfield, IL 62756
Telephone (217) 782-1832 FILED Date 03-03-95
MAR 3 1995 Franchise Tax $
Remit payment in check GEORGE H. RYAN Filing Fee* $25.00
or money order, payable SECRETARY OF STATE Penalty $
to "Secretary of State." Approved: MA
*The filing fee for articles of amendment - $25.00
- --------------------------------------------------------------------------------
1. CORPORATE NAME: PEOPLES ENERGY CORPORATION
---------------------------------------------------
(Note 1)
2. MANNER OF ADOPTION OF AMENDMENT:
The following amendment of the Articles of Incorporation was adopted
on February 24, 1995 in the manner indicated below. ("X" one box only)
[ ] By a majority of the incorporators, provided no directors were named
in the articles of incorporation and no directors have been elected; (Note 2)
[ ] By a majority of the board of directors, in accordance with Section
10.10, the corporation having issued no shares as of the time of adoption of
this amendment; (Note 2)
[ ] By a majority of the board of directors, in accordance with Section
10.15, shares having been issued but shareholder action not being required for
the adoption of the amendment; (Note 3)
[X] By the shareholders, in accordance with Section 10.20, a resolution of
the board of directors having been duly adopted and submitted to the
shareholders. At a meeting of shareholders, not less than the minimum number of
votes required by statute and by the articles of incorporation were voted in
favor of the amendment; (Note 4)
[ ] By the shareholders, in accordance with Sections 10.20 and 7.10, a
resolution of the board of directors having been duly adopted and submitted to
the shareholders. A consent in writing has been signed by shareholders having
not less than the minimum number of votes required by statute and by the
articles of incorporation. Shareholders who have not consented in writing have
been given notice in accordance with Section 7.10; (Notes 4&5)
[ ] By the shareholders, in accordance with Sections 10.20 and 7.10, a
resolution of the board of directors having been duly adopted and submitted to
the shareholders. A consent in writing has been signed by all the shareholders
entitled to vote on this amendment. (Note 5)
3. TEXT OF AMENDMENT:
a. When amendment effects a name change, insert the new corporate name
below. Use Page 2 for all other amendments.
Article I: The name of the corporation is:
- --------------------------------------------------------------------------------
(NEW NAME)
all changes other than name, include on page 2
(over)
<PAGE>
Text of Amendment
b. (If amendment affects the corporate purpose, the amended purpose is
required to be set forth in its entirety. If there is not sufficient space to
do so, add one or more sheets of this size.)
(See attached pages)
Page 2
<PAGE>
The Articles of Incorporation are amended by adding the following new
Article Ten and Article Eleven thereto:
ARTICLE TEN
No director of the corporation shall be liable to the corporation
or to the shareholders of the corporation for monetary damages
for breach of fiduciary duties as a director, provided that this
Article Ten shall not eliminate or limit the liability of a
director (i) for any breach of the director's duty of loyalty to
the corporation or its shareholders, (ii) for acts or omissions
not in good faith or that involve intentional misconduct or a
knowing violation of law, (iii) under Section 8.65 of the
Illinois Business Corporation Act of 1983, as amended or (iv) for
any transaction from which the director derived an improper
personal benefit. This Article Ten shall not eliminate or limit
the liability of a director of the corporation for any act or
omission occurring before the date on which this Article Ten
becomes effective. Any repeal or modification of this Article
Ten by the shareholders of the corporation shall not adversely
affect any right or protection of a director of the corporation
existing at the time of such repeal or modification.
ARTICLE ELEVEN
Paragraph 1: The corporation shall indemnify, to the fullest extent permitted
under the laws of the State of Illinois and any other applicable
laws, as they now exist or as they may be amended in the future,
any person who was or is a party, or is threatened to be made a
party, to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative (including, without limitation, an action by or in
the right of the corporation), by reason of the fact that he or
she is or was a director, officer or employee of the corporation,
or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation,
<PAGE>
partnership, joint venture, trust, employee benefit plan or other
enterprise against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such
action, suit or proceeding.
Paragraph 2: Expenses incurred by such a director, officer or employee in
defending a civil or criminal action, suit or proceeding shall be
paid by the corporation in advance of the final disposition of
such action, suit or proceeding to the fullest extent permitted
under the laws of the State of Illinois and any other applicable
laws, as they now exist or as they may be amended in the future.
Paragraph 3: The board of directors may, by resolution, extend the provisions
of this Article Eleven regarding indemnification and the
advancement of expenses to any person who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action, suit or proceeding by reason of the fact he or
she is or was an agent of the corporation or is or was serving at
the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise.
Paragraph 4: The rights provided by or granted under this Article Eleven are
not exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled.
Paragraph 5: The indemnification and advancement of expenses provided by or
granted under this Article Eleven shall continue as to a person
who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs, executors and
administrators of that person.
<PAGE>
4. The manner, if not set forth in Article 3b, in which any exchange,
reclassification or cancellation of issued shares, or a reduction of the
number of authorized shares of any class below the number of issued shares
of that class, provided for or effected by this amendment, is as follows:
(If not applicable, insert "No change")
No change.
5. (a) The manner, if not set forth in Article 3b, in which said amendment
effects a change in the amount of paid-in capital (Paid-in capital replaces
the terms Stated Capital and Paid-in Surplus and is equal to the total of
these accounts) is as follows: (if not applicable, insert "No change")
No change.
(b) The amount of paid-in capital (Paid-in Capital replaces the terms
Stated Capital and Paid-in Surplus and is equal to the total of these
accounts) as changed by this amendment is as follows: (If not applicable,
insert "No change")
No change.
Before Amendment After Amendment
Paid-in Capital $_______________ $______________
(Complete either Item 6 or 7 below. All signatures must be in BLACK INK.)
6. The undersigned corporation has caused this statement to be signed by its
duly authorized officers, each of whom affirms, under penalties of perjury,
that the facts stated herein are true.
Dated March 2, 1995 Peoples Energy Corporation
--------------------------
(Exact Name of Corporation at date
of execution)
attested by /s/Emmet P. Cassidy by /s/Kenneth S. Balaskovits
------------------- ----------------------------
(Signature of Secretary) (Signature of Vice President)
Emmet P. Cassidy, Secretary Kenneth S. Balaskovits, Vice
- --------------------------- President
(Type or Print Name and Title) ----------------------------
(Type or Print Name and Title)
7. If amendment is authorized pursuant to Section 10.10 by the incorporators,
the incorporators must sign below, and type or print name and title.
OR
If amendment is authorized by the directors pursuant to Section 10.10 and
there are no officers, then a majority of the directors or such directors
as may be designated by the board, must sign below, and type or print name
and title.
The undersigned affirms, under the penalties of perjury, that the facts stated
herein are true.
Dated , 19
- ----------------------------- -----
- ------------------------------ ---------------------------
- ------------------------------ ---------------------------
- ------------------------------ ---------------------------
- ------------------------------ ---------------------------
Page 3
<PAGE>
NOTES and INSTRUCTIONS
NOTE 1: State the true exact corporate name as it appears on the records of
the office of the Secretary of State, BEFORE any amendments herein
reported.
NOTE 2: Incorporators are permitted to adopt amendments ONLY before any shares
have been issued and before any directors have been named or elected.
(Section 10.10)
NOTE 3: Directors may adopt amendments without shareholder approval in only
seven instances, as follows:
(a) to remove the names and addresses of directors named in the articles
of incorporation;
(b) to remove the name and address of the initial registered agent and
registered office, provided a statement pursuant to Section 5.10 is
also filed;
(c) to increase, decrease, create or eliminate the par value of the shares
of any class, so long as no class or series of shares is adversely
affected.
(d) to split the issued whole shares and unissued authorized shares by
multiplying them by a whole number, so long as no class or series is
adversely affected thereby;
(e) to change the corporate name by substituting the word "corporation",
"incorporated", "company", "limited", or the abbreviation "corp",
"inc.", "co.," or "ltd." for a similar word or abbreviation in the
name, or by adding a geographical attribution to the name;
(f) to reduce the authorized shares of any class pursuant to a
cancellation statement filed in accordance with Section 9.05,
(g) to restate the articles of incorporation as currently amended.
(Section 10.15)
NOTE 4: All amendments not adopted under Section 10.10 or Section 10.15
require (1) that the board of directors adopt a resolution setting
forth the proposed amendment and (2) that the shareholders approve the
amendment.
Shareholder approval may be (1) by vote at a shareholders' meeting
(either annual or special) or (2) by consent, in writing, without a
meeting.
To be adopted, the amendment must receive the affirmative vote or
consent of the holders of at least 2/3 of the outstanding shares
entitled to vote on the amendment (but if class voting applies, then
also at least 2/3 vote within each class is required).
The articles of incorporation may supersede the 2/3 vote requirement
by specifying any smaller or larger vote requirement not less than a
majority of the outstanding shares entitled to vote and not less than
a majority within each class when class voting applies. (Section
10.20)
NOTE 5: When shareholder approval is by consent, all shareholders must be
given notice of the proposed amendment at least 5 days before the
consent is signed. If the amendment is adopted, shareholders who have
not signed the consent must be promptly notified of the passage of the
amendment. (Sections 7.10 & 10.20)
C-173.9
Page 4
<PAGE>
File #D4791-313-6
Form BCA-5.10
NFP-105.10
(Rev. Jan. 1995)
George H. Ryan
Secretary of State
Department of Business
Services
Springfield, IL 62756
Telephone (217) 782-3647 SUBMIT IN DUPLICATE
STATEMENT OF FILED This space for use by
CHANGE MAR 8 1995 Secretary of State
OF REGISTERED AGENT
AND/OR REGISTERED GEORGE H. RYAN Date 03-08-95
OFFICE SECRETARY OF STATE
Filing Fee $ 5
Approved: MA
PAID Remit payment in check or
money order, payable to
MAR 8 1995 "Secretary of State"
1. CORPORATE NAME: Peoples Energy Corporation
2. STATE OR COUNTRY OF INCORPORATION: Illinois
- --------------------------------------------------------------------------------
3. Name and address of the registered agent and registered office as they
appear on the records of the office of the Secretary of State (before
change):
Registered Agent Emmet P. Cassidy
-------------------------------------------------------
First Name Middle Name Last Name
Registered Office 122 S. Michigan Avenue
-------------------------------------------------------
Number Street Suite No. (A.P.O. Box alone is not
acceptable)
Chicago 60603 Cook
-------------------------------------------------------
City Zip Code County
4. Name and address of the registered agent and registered office shall be
(after all changes herein reported):
Registered Agent Emmet P. Cassidy
-------------------------------------------------------
First Name Middle Name Last Name
Registered Office 130 E. Randolph Drive
-------------------------------------------------------
Number Street Suite No. (A.P.O. Box alone is not
acceptable)
Chicago 60601 Cook
-------------------------------------------------------
City Zip Code County
<PAGE>
AFTER RECORDING RETURN TO:
Frankie Shaffer
Peoples Energy Corporation
130 East Randolph Dr. 24th FL
Chicago, IL 60601
5. The address of the registered office and the address of the business office
of the registered agent, as changed, will be identical.
6. The above change was authorized by: ("X" one box only)
a.[ ] By resolution duly adopted by the board of directors. (Note 5)
b.[ X] By action of the registered agent. (Note 6)
NOTE: When the registered agent changes, the signatures of both president
and secretary are required.
7. (If authorized by the board of directors, sign here. See Note 5)
The undersigned corporation has caused this statement to be signed by its
duly authorized officers, each of whom affirms, under penalties of perjury, that
the facts stated herein are true.
Dated 19,
--------------- ------- ---------------------------------
(Exact Name of Corporation)
attested by by
----------------------------------- ----------------------------
(Signature of Secretary or (Signature of Vice President)
Assistant Secretary
- ---------------------------------------------- ------------------------------
(Type or Print Name and Title) (Type or Print Name and Title)
(If change of registered office by registered agent, sign here. See Note 6)
The undersigned, under penalties of perjury, affirms that the facts stated
herein are true.
Dated February 17 1995 /s/Emmet P. Cassidy
---------------- -------------------
(Signature of Registered
Agent of Record)
NOTES
1. The registered office may, but need not be the same as the principal office
of the corporation. However the registered office and the office address
of the registered agent must be the same.
2. The registered office must include a street or road address; a post office
box number alone is not acceptable.
3. A corporation cannot act as its own registered agent.
4. If the registered office is changed from one county to another, then the
corporation must file with the recorder of deeds of the new county a
certified copy of the articles of incorporation and a certified copy of the
statement of change of registered office. Such certified copies may be
obtained ONLY from the Secretary of State.
5. Any change of registered agent must be by resolution adopted by the board
of directors. This statement must then be signed by the president (or
vice-president) and by the secretary (or an assistant secretary).
6. The registered agent may report a change of the registered office of the
corporation for which he or she is registered agent. When the agent
reports such a change, this statement must be signed by the registered
agent.
<PAGE>
TRUST UNDER PEOPLES ENERGY CORPORATION
EXECUTIVE DEFERRED COMPENSATION PLAN AND
SUPPLEMENTAL RETIREMENT BENEFIT PLAN, PART A AND PART B
(a) This Agreement made this 22nd day of September, 1995, by and
between Peoples Energy Corporation ("Company") and Harris Trust and Savings
Bank, a banking corporation organized under the laws of the State of Illinois
("Trustee");
(b) WHEREAS, Company wishes to establish a trust (hereinafter called
"Trust") and to contribute to the Trust assets that shall be held therein,
subject to the claims of Company's creditors in the event of Company's
Insolvency, as herein defined, until paid to all of the participants and
their beneficiaries in the Peoples Energy Corporation Supplemental Retirement
Benefit Plan, Part A and Part B and to all of the participants and their
beneficiaries in the Peoples Energy Corporation Executive Deferred
Compensation Plan (such plans are hereinafter collectively referred to as the
"Plans" and the participants and their beneficiaries in such plans are
hereinafter referred to as "Participants" and "Beneficiaries", respectively,
or in the singular, as the context requires) in such manner and at such time
as specified in the Plans;
(c) WHEREAS, it is the intention of the parties that this Trust
shall constitute an unfunded arrangement and shall not affect the status of
the Plans as unfunded Plans maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
for purposes of Title I of the Employee Retirement Income Security Act of
1974;
(d) WHEREAS, it is the intention of Company to make contributions to
the Trust to provide itself with a source of funds to assist it in the
meeting of its liabilities under the Plans;
<PAGE>
NOW, THEREFORE, the parties do hereby establish the Trust and agree that
the Trust shall be comprised, held and disposed of as follows:
SECTION 1. ESTABLISHMENT OF TRUST.
(a) The principal of the Trust shall be held, administered and
disposed of by Trustee as provided in this Trust Agreement.
(b) The Trust shall become irrevocable upon approval by the Board of
Directors. Company shall promptly inform Trustee in writing of such action
of the Board of Directors.
(c) The Trust is intended to be a grantor trust, of which Company is
the grantor, within the meaning of subpart E, part I, subchapter J, chapter
1, subtitle A of the Internal Revenue Code of 1986, as amended (the "Internal
Revenue Code"), and shall be construed accordingly.
(d) The principal of the Trust and any earnings thereon shall be
held separate and apart from other funds of Company and shall be used
exclusively for the uses and purposes of the Participants and their
Beneficiaries and general creditors as herein set forth. The Participants
and their Beneficiaries shall have no preferred claim on, or any beneficial
ownership interest in, any assets of the Trust. Any rights credited under
the Plans and this Trust Agreement shall be mere unsecured contractual rights
of the Participants and their Beneficiaries against Company. Any assets held
by the Trust will be subject to the claims of Company's general creditors
under federal and state law in the event of Insolvency, as defined in Section
3(a) herein.
(e) Company, in its sole discretion, may at any time, or from time
to time, make deposits of cash or other property in Trust with Trustee to
augment the principal to be held, administered and disposed of by Trustee as
provided in this Trust Agreement.
-2-
<PAGE>
Neither Trustee nor any Participant or his or her Beneficiary shall have any
right to compel such deposits.
SECTION 2. PAYMENTS TO PARTICIPANTS AND THEIR BENEFICIARIES.
(a) Company shall deliver to Trustee a schedule (the "Payment
Schedule") that indicates the amounts payable in respect of each Participant
and his or her Beneficiaries, that provides a formula or other instructions
acceptable to Trustee for determining the amounts so payable, the form in
which such amount is to be paid (as provided for or available under the
Plans), and the time of commencement for payment of such amounts. Except as
otherwise provided herein, Trustee shall make payments to the Participants
and their Beneficiaries in accordance with such Payment Schedule. The
Trustee shall make provision for the reporting and withholding of any
federal, state or local taxes that may required to be withheld with respect
to the payment of benefits pursuant to the terms of the Plans and shall pay
amounts withheld to the appropriate taxing authorities or determine that such
amounts have been reported, withheld and paid by Company. Prior to a Change
of Control, Company may provide Trustee with a revised Payment Schedule. A
revised Payment Schedule shall be effective upon its receipt by Trustee and
shall supersede any and all Payment Schedules previously delivered by Company
to Trustee with respect to a Participant. At the time a revised Payment
Schedule is delivered to Trustee, Company shall also provide a written
certification that there has been no Change of Control and Trustee shall be
fully protected in relying upon such certification. Trustee shall be fully
protected in making payments to Participants in the amount, manner, and at
the time or times specified in the Payment Schedule provided by Company
pursuant to this Section, and Trustee shall be indemnified and saved harmless
as provided in Section 12 hereof for acting upon such direction of Company.
(b) The entitlement of a Participant or his or her Beneficiaries to
benefits under the Plans shall be determined by Company or such party as it
shall designate under the Plans, and any claim for such benefits shall be
considered and reviewed under the
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<PAGE>
procedures set out in the Plans. Trustee shall have no responsibility or
duty to make any such determination.
(c) Company may make payment of benefits directly to Participants or
their Beneficiaries as they become due under the terms of the Plans. Company
shall notify Trustee of its decision to make payment of benefits directly
prior to the time amounts are payable to Participants or their Beneficiaries.
In addition, if the principal of the Trust, and any earnings thereon, are
not sufficient to make payments of benefits in accordance with the terms of
the Plans, Company shall make the balance of each such payment as it falls
due. Trustee shall notify Company where principal and earnings are not
sufficient.
SECTION 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO
TRUST BENEFICIARY WHEN COMPANY IS INSOLVENT.
(a) Trustee shall cease payment of benefits to Participants and their
Beneficiaries if the Company is Insolvent. Company shall be considered
"Insolvent" or in a condition of "Insolvency" for purposes of this Trust
Agreement if (i) Company is unable to pay its debts as they become due, or
(ii) Company is subject to a pending proceeding as a debtor under the United
States Bankruptcy Code.
(b) At all times during the continuance of this Trust, as provided in
Section 1(d) hereof, the principal and income of the Trust shall be subject
to claims of general creditors of Company under federal and state law as set
forth below.
(1) The Board of Directors and the Chief Executive Officer of Company
shall have the duty to inform Trustee in writing of Company's Insolvency. If
a person claiming to be a creditor of Company alleges in writing to Trustee
that Company has become Insolvent, Trustee shall determine whether Company is
Insolvent and, pending such determination, Trustee shall discontinue payment
of benefits to Participants or their Beneficiaries.
-4-
<PAGE>
(2) Unless Trustee has actual knowledge of Company's Insolvency, or
has received notice from Company or a person claiming to be a creditor
alleging that Company is Insolvent, Trustee shall have no duty to inquire
whether Company is Insolvent. Trustee may in all events rely on such
evidence concerning Company's solvency as may be furnished to Trustee and
that provides Trustee with a reasonable basis for making a determination
concerning Company's solvency.
(3) If at any time Trustee has determined that Company is Insolvent,
Trustee shall discontinue payments to Participants or their Beneficiaries and
shall hold the assets of the Trust for the benefit of Company's general
creditors. Nothing in this Trust Agreement shall in any way diminish any
rights of Participants or their Beneficiaries to pursue their rights as
general creditors of Company with respect to benefits due under the Plans or
otherwise.
(4) Trustee shall resume the payment of benefits to Participants or
their beneficiaries in accordance with Section 2 of this Trust Agreement only
after Trustee has determined that Company is not Insolvent (or is no longer
Insolvent).
(c) Provided that there are sufficient assets, if Trustee discontinues
the payment of benefits from the Trust pursuant to Section 3(b) hereof and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to
Participants or their Beneficiaries under the terms of the Plans for the
period of such discontinuance, less the aggregate amount of any payments made
to Participants or their Beneficiaries by Company in lieu of the payments
provided for hereunder during any such period of discontinuance.
SECTION 4. PAYMENTS TO COMPANY.
Except as provided in Section 3 hereof, after the Trust has become
irrevocable, Company shall have no right or power to direct Trustee to return
to Company or to divert to others any of the Trust assets before all payment
of benefits have been made to Participants and their Beneficiaries pursuant
to the terms of the Plans. Prior to the
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<PAGE>
time the Trust becomes irrevocable pursuant to Section 1(b) hereof, Company
may direct Trustee in writing to return to Company any of the Trust assets,
and, in the event Company so directs Trustee, Company shall certify to
Trustee in such writing that the Trust is not irrevocable. Trustee shall be
fully protected in relying on such certification.
SECTION 5. INVESTMENT AUTHORITY.
(a) Except as provided in paragraph (b) or in any investment
guidelines issued by Company, Trustee may invest and reinvest Trust assets
without distinction between principal and income, in obligations of the
United States Government and/or in other classifications of investment such
as bonds, notes, debentures, mortgages, equipment trusts, investment trusts,
or voting trust certificates, preferred or common stock (which term shall
include shares of investment companies registered under the Investment
Company Act of 1940), common or commingled trust funds established pursuant
to a declaration of trust, the provisions of which are hereby incorporated
and made a part hereof, or other securities or property of any kind, real or
personal, either within or without the State of Illinois without limitation
by reason of any state statute or local rule of law regarding investment of
trust funds, except that the Trustee shall not invest any Trust assets in any
securities issued by Company other than a de minimis amount held in common
investment vehicles in which Trustee invests nor in any real or personal
property leased to Company.
(b) Company shall have the right to appoint and remove an investment
manager (as defined in Section 3(38) of ERISA) from time to time and to
direct the segregation of any part or all of the Trust assets into one or
more accounts, to be known as "investment manager accounts". Written notice
of any such appointment or removal shall be given to Trustee and the
investment manager so appointed or removed. As long as the investment
manager is acting, such investment manager shall direct Trustee to invest and
Trustee shall invest the assets of the investment manager account in any
investment or class of investment allowed pursuant to Section 5(a) above.
The investment manager shall have full authority and the responsibility to
direct
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<PAGE>
Trustee with respect to the acquisition, retention, management, and
disposition of all of the assets from time to time comprising the investment
manager account being managed by such investment manager and the voting of
proxies thereon, and Trustee shall have no duty or obligation to review the
assets from time to time comprising such investment manager account, to make
recommendations with respect to the investment, reinvestment, or retention
thereof, nor with respect to the voting of proxies thereon, nor to determine
whether any direction from such investment manager is proper or within the
terms of this Agreement.
Notwithstanding the foregoing provisions, Trustee, without further prior
approval of Company or direction from the investment manager, shall have the
power, right and authority to invest cash balances held by it from time to
time as part of an investment manager account and, further, Trustee is hereby
directed by Company to exercise this power, right and authority by investing
such cash balances in short-term cash equivalents having ready marketability,
including, specifically, appropriate funds of the Harris Insight Funds or
Harris Personal Investment Funds, in addition to United States treasury
bills, commercial paper, and similar types of securities, and Trustee without
prior approval or direction shall have the power, right and authority to sell
such short-term investments as may be necessary to carry out the instructions
of the investment manager with respect to investing the investment manager
account.
Trustee shall have no liability or responsibility to Company or any
beneficiary of the Trust for acting without question on the direction of, or
for failure to act in the absence of directions from the investment manager
for any investment manager account previously established, and the
appointment of any investment manager for that account shall continue in
force until receipt of written notice to the contrary from Company. In
addition, Trustee shall have no responsibility to invest or manage any asset
held in an investment manager account (except for the investment of cash
balances as provided above) until Trustee is (1) notified by Company in
writing of the termination of the investment manager's authority over the
assets of such account and (2) directed in writing to terminate the
investment manager account and to transfer the
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<PAGE>
assets of such account to general Trust assets or to another investment
manager account.
SECTION 6. DISPOSITION OF INCOME.
During the term of this Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested.
SECTION 7. ACCOUNTING BY TRUSTEE.
Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in writing between
Company and Trustee. Within thirty (30) days following the close of each
calendar year and within thirty (30) days after the removal or resignation of
Trustee, Trustee shall deliver to Company a written account of its
administration of the Trust during such year or during the period from the
close of the last preceding year to the date of such removal or resignation,
setting forth all investments, receipts, disbursements and other transactions
effected by it, including a description of all securities and investments
purchased and sold with the cost or net proceeds of such purchases or sales
(accrued interest paid or receivable being shown separately), and showing all
cash, securities and other property held in the Trust at the end of such year
or as of the date of such removal or resignation, as the case may be.
SECTION 8. RESPONSIBILITY OF TRUSTEE.
(a) Trustee shall act with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent person acting in like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims, provided, however, that
Trustee shall incur no liability to any person for any action taken pursuant
to a direction, request or approval given by Company or an investment manager
which is contemplated by, and in conformity with, the terms of the Plans or
this Trust and is given in writing by Company or an investment manager. In
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<PAGE>
the event of a dispute between Company and a party, Trustee may apply to a
court of competent jurisdiction to resolve the dispute.
(b) Trustee may consult with legal counsel (who may also be counsel
for Company generally) with respect to any of its duties or obligations
hereunder.
(c) Trustee shall have, without exclusion, all powers conferred on
Trustees by applicable law, unless expressly provided otherwise herein;
provided, however, that if an insurance policy is held as an asset of the
Trust, Trustee shall have no power to name a beneficiary of the policy other
than the Trust, to assign the policy (as distinct from conversion of the
policy to a different form) other than to a successor Trustee, or to loan to
any person the proceeds of any borrowing against such policy.
(d) Notwithstanding any powers granted to Trustee pursuant to this
Trust Agreement or to applicable law, Trustee shall not have any power that
could give this Trust the objective of carrying on a business and dividing
the gains therefrom, within the meaning of Section 301.7701-2 of the
Procedure and Administrative Regulations promulgated pursuant to the Internal
Revenue Code.
SECTION 9. COMPENSATION AND EXPENSES OF TRUSTEE.
Company shall pay all reasonable Trust administration fees and expenses,
including Trustee's fees (as agreed upon from time to time between Trustee
and Company). If not so paid on a timely basis, such fees and expenses shall
be paid from the Trust.
SECTION 10. RESIGNATION AND REMOVAL OF TRUSTEE.
(a) Trustee may resign at any time by written notice to Company, which
shall be effective ninety (90) days after receipt of such notice unless
Company and Trustee agree otherwise.
-9-
<PAGE>
(b) Subject to subsection (c), Trustee may be removed by Company on
sixty (60) days notice or upon shorter notice accepted by Trustee.
(c) Upon a Change of Control, as defined herein, Trustee may not be
removed by Company for one (1) year.
(d) If Trustee resigns within one (1) year of a Change of Control, as
defined herein, Company shall apply to a court of competent jurisdiction for
the appointment of a successor Trustee or for instructions.
(e) Upon resignation or removal of Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to the
successor Trustee. The transfer shall be completed within thirty (30) days
after receipt of notice of resignation, removal or transfer, unless Company
extends the time limit.
(f) If Trustee resigns or is removed, a successor shall be appointed,
in accordance with Section 11 hereof, by the effective date of resignation or
removal under paragraphs (a) or (b) of this Section. If no such appointment
has been made, Trustee may apply to a court of competent jurisdiction for
appointment of a successor or for instructions. All expenses of Trustee in
connection with the proceeding shall be allowed as administrative expenses of
the Trust.
(g) "Change of Control" as used in this Trust shall be deemed to have
occurred if any one of the following events has occurred:
(i) Twenty percent (20%) or more of the Company's outstanding shares
of common stock have been acquired by any natural person, company,
corporation, partnership, trust, group, government, or political
subdivision, agency, or instrumentality of a government or other
entity ("Person") other than directly from the Company; or
(ii) There has been a merger or equivalent combination after which
forty-nine percent (49%) or more of the voting stock of the
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<PAGE>
surviving corporation is held by any Person other than former
stockholders of the Company; or
(iii) Twenty percent (20%) or more of the directors elected by
stockholders to the Board of Directors of the Company are persons
who were not nominated by management in the most recent proxy
statement of the Company; or
(iv) The stockholders of the Company approve: (A) a plan of complete
liquidation of the Company or (B) an agreement for the sale or
disposition of all or substantially all of the Company's assets.
Company shall notify Trustee in writing of the occurrence of a Change of
Control and Trustee may rely on such notice as it receives with respect
thereto. Trustee shall have no obligation or duty to make an independent
determination as to the occurrence of a Change of Control.
SECTION 11. APPOINTMENT OF SUCCESSOR.
If Trustee resigns or is removed in accordance with Section 10(a) or (b)
hereof, Company may appoint any third party, such as a bank trust department
of other party that may be granted corporate trustee powers under state law,
as a successor to replace Trustee upon resignation or removal, except that if
Trustee resigns within one year of a Change of Control, a new Trustee shall
be appointed as provided in Section 10(d) hereof. The appointment of a
successor Trustee shall be effective when accepted in writing by the new
Trustee, who shall have all of the rights and powers of the former Trustee,
including ownership rights in the Trust assets. The former Trustee shall
execute any instrument necessary or reasonably requested by Company or the
successor Trustee to evidence the transfer.
SECTION 12. TRUSTEE INDEMNIFICATION.
Trustee shall be indemnified and saved harmless by Company, from and
against any and all liability, including all expenses reasonably incurred in
its defense, arising
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<PAGE>
out of or in connection with its good faith performance of its duties and
responsibilities under this Trust Agreement. Any expenses incurred by
Trustee in enforcing its right of indemnification as provided under this
Section 12 shall be paid by Company.
SECTION 13. ADDITIONAL TRUSTEE POWERS.
In addition to the powers granted to Trustee in other Sections of this
Trust Agreement or as may be provided by law, Trustee shall have the power:
(a) to hold any securities or other property of the Trust Fund in the
name of Trustee or a nominee, or in such form as it deems best, with or
without disclosing the trust relationship;
(b) upon notification to the Company and its consent, which will not
be unreasonably withheld, to begin, defend or maintain any litigation
necessary in connection with the Plan or this Trust, and Company shall
indemnify Trustee against Trustee's costs, expenses and liabilities relating
thereto (including reasonable attorney's fees);
(c) to retain any funds or property subject to any dispute without
liability for payment of interest or to withhold payment or delivery thereof
until final adjudication of the dispute by a court of competent jurisdiction;
(d) to deposit securities with a clearing corporation as defined in
Article 8 of the Illinois Uniform Commercial Code, and to participate in and
use the Federal Book-Entry Account System, a service provided by the Federal
Reserve Bank for its member banks for deposit of eligible securities;
(e) to hire agents, experts and counsel to assist it in performing any
of its duties or obligations hereunder; and
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<PAGE>
(f) to perform any and all other acts in its judgment necessary or
appropriate for the proper and advantageous management, investment and
distribution of the Trust Fund.
SECTION 14. AMENDMENT OR TERMINATION.
(a) This Trust Agreement may be amended by a written instrument
executed by Trustee and Company. Notwithstanding the foregoing, no such
amendment shall conflict with the terms of the Plans or shall make the Trust
revocable after it has become irrevocable in accordance with Section 1(b)
hereof.
(b) The Trust shall not terminate until the date on which Participants
and their Beneficiaries are no longer entitled to benefits pursuant to the
terms of the Plans, unless sooner revoked in accordance with Section 1(b)
hereof. Upon termination of the Trust, any assets remaining in the Trust
shall be returned to Company.
(c) Upon written approval of all Participants or Beneficiaries
entitled to payment of benefits pursuant to the terms of the Plans, Company
may terminate this Trust prior to the time all benefit payments under the
Plans have been made. All assets in the Trust at termination shall be
returned to Company.
SECTION 15. MISCELLANEOUS.
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
(b) Benefits payable to Participants and their Beneficiaries under
this Trust Agreement may not be anticipated, assigned (either at law or in
equity), alienated, pledged, encumbered or subjected to attachment,
garnishment, levy, execution or other legal or equitable process.
(c) This Trust Agreement shall be governed by and construed in
accordance with the laws of Illinois.
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<PAGE>
SECTION 16. EFFECTIVE DATE.
The effective date of this Trust Agreement shall be September 25, 1995.
IN WITNESS WHEREOF, Company and Trustee have caused this Trust Agreement
to be executed and delivered as of the effective date set forth above.
TRUSTEE: COMPANY:
HARRIS TRUST AND SAVINGS BANK PEOPLES ENERGY CORPORATION
By: /s/ Katherine B Allen By: /s/ E. P. Cassidy
--------------------------- ---------------------------
Its: Vice President Secretary and Treasurer
--------------------------
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<PAGE>
EXHIBIT 10(a)
Date: September 21, 1994 Contract No. 03050
ETS SERVICE AGREEMENT
This AGREEMENT is entered into by ANR Pipeline Company
(Transporter) and The Peoples Gas Light and Coke Company (Shipper)
WHEREAS, Shipper has requested Transporter to transport Gas on
its behalf and Transporter represents that it is willing to
transport Gas under the terms and conditions of this Agreement.
NOW, THEREFORE, Transporter and Shipper agree that the terms
below, together with the terms and conditions of Transporter's
applicable Rate Schedule and General Terms and Conditions of
Transporter's FERC Gas Tariff constitute the transportation
service to be provided and the rights and obligations of Shipper
and Transporter.
1. AUTHORITY FOR TRANSPORTATION SERVICE:
284G - Blanket
2. RATE SCHEDULE: Firm Transportation Service (ETS)
3. CONTRACT QUANTITIES:
Receipt Points - see Exhibit attached hereto.
Delivery Points - see Exhibit attached hereto.
Primary Routes - see Exhibit attached hereto.
Such Contract Quantities shall be reduced for scheduling
purposes, but not for billing purposes, by the Contract
Quantities that Shipper has released through Transporter's
capacity release program for the period of any release.
4. TERM OF AGREEMENT:
04/01/1995 to
03/31/2000
<PAGE>
Date: September 21, 1994 Contract No. 03050
5. RATES:
Maximum rates, charges, and fees shall be applicable for the
entitlements and quantities delivered pursuant to this Agreement
unless Transporter has advised Shipper in writing or by ANR
Xpedite that it has agreed otherwise.
It is further agreed that Transporter may seek authorization
from the Commission and/or other appropriate body at any time and
from time to time to change any rates, charges or other
provisions in the applicable Rate Schedule and General Terms and
Conditions of Transporter's FERC Gas Tariff, and Transporter
shall have the right to place such changes in effect in
accordance with the Natural Gas Act. This Agreement shall be
deemed to include such changes and any changes which become
effective by operation of law and Commission order. Nothing
contained herein shall be construed to deny Shipper any rights it
may have under the Natural Gas Act, including the right to
participate fully in rate or other proceedings by intervention or
otherwise to contest increased rates in whole or in part.
6. INCORPORATION BY REFERENCE
The provisions of Transporter's applicable Rate Schedule and
the General Terms and Conditions of Transporter's FERC Gas Tariff
are specifically incorporated herein by reference and made a part
hereof.
7. NOTICES:
All notices can be given by telephone or other electronic
means, however, such notice shall be confirmed in writing at the
addresses below or through ANR Xpedite. Shipper or Transporter
may change the addresses below by written notice to the other
without the necessity of amending this agreement:
TRANSPORTER:
ANR PIPELINE COMPANY
500 Renaissance Center
Detroit, Michigan 48243
Attentions: Gas Control (Nominations)
Volume Management (Statements)
Cash Control (Payments)
Customer Services and Business Administration
(All Other Matters)
<PAGE>
Date: September 21, 1994 Contract No. 03050
SHIPPER:
The Peoples Gas Light and Coke Company (Shipper Name)\
--------------------------------------
122 S. Michigan Ave., Room 915 (Address)
------------------------------
Chicago, IL 60603 (City, State, Zip)
-------------------
Attention: Mr. Eckhard Blaumueller
-----------------------
Telephone: (312) 431-7057
--------------
Fax: (312) 431-4558
--------------
INVOICES AND STATEMENTS:
The Peoples Gas Light and Coke Company (Shipper Name)
--------------------------------------
122 S. Michigan Ave., Room 915 (Address)
------------------------------
Chicago, IL 60603 (City, State, Zip)
------------------
Attention: Mr. Eckhard Blaumueller
-----------------------
Telephone: (312) 431-7057
--------------
Fax: (312) 431-4558
--------------
NOMINATIONS:
The Peoples Gas Light and Coke Company (Shipper Name)
--------------------------------------
122 S. Michigan Ave., Room 915 (Address)
------------------------------
Chicago, IL 60603 (City, State, Zip)
------------------
Attention: Mr. Jerry Slechta
-----------------
Telephone: (312) 431-4362
--------------
Fax: (312) 431-4558
--------------
Mechanical Dialing
Device No (s)-------------------------
<PAGE>
Date: September 21, 1994 Contract No. 03050
ALL OTHER MATTERS:
The Peoples Gas Light and Coke Company (Shipper Name)
--------------------------------------
122 S. Michigan Ave., Room 915 (Address)
------------------------------
Chicago, IL 60603 (City, State, Zip)
-------------------
Attention: Mr. Eckhard Blaumueller
-----------------------
Telephone: (312) 431-7057
--------------
Fax: (312) 431-4558
--------------
8. FURTHER AGREEMENT
A. For transportation under ETS Agreement (No. 03050) and
storage under FSS Agreement (No. 34050), Shipper shall pay a
single rate covering both the transportation and storage services
not to exceed, for each 12 month period, $0.90 times 3.75 BCF for
years one and two (April 1, 1995 through March 31, 1997) and for
years three through five (April 1, 1997 through March 31, 2000) a
rate not to exceed, for each 12 month period, $1.05 times 3.75
BCF. The aforementioned rates are inclusive of Volumetric
Buyout/Buydown, Dakota and Transition Costs. In addition,
Shipper will be charged ACA, applicable GRI, fuel and any other
related fees or surcharges.
B. For billing purposes, Transporter has discretion in
determining the portion of the rate to be assigned to
transportation and/or storage as well as the portion of the rate
to be assigned to Reservation and/or Commodity.
C. From time to time dependent upon Transporter's use percents,
the MDQ's and MSQ under ETS Agreement (No. 03050) and FSS
Agreement (No. 34050) will be adjusted to allow Shipper to
deliver and store sufficient fuel quantities to effectuate a 50
day storage withdrawal quantity of 75,000 dth at the specified
delivery points at no additional charge.
<PAGE>
Date: September 21, 1994 Contract No. 03050
D. Shipper can use the unused portion of its Primary Route MDQ
on a Secondary basis at the following receipt points at no
additional charge:
1. Joliet (NGPL)
2. Defiance (PEPL)
3. Joliet (Midwestern)
4. Shorewood (NIGAS) - (by displacement)
5. Kalkaska or Chester (Mich Con)
6. East Joliet (PGL&C) - (by displacement)
7. Elkhart (Trunkline)
8. Crystal Falls (GLGT)
E. Shipper and Transporter agree that the rates stated herein
shall be confidential and shall be maintained confidentially by
Shipper and Transporter. Shipper or Transporter may disclose
such rates only if such disclosure is required by law and Shipper
or Transporter requests confidential or privileged treatment
under applicable statutes, rules and regulations, and provides
reasonable notice to the other party prior to such disclosure.
Any unauthorized disclosure by Shipper of the rates stated herein
shall have the effect of terminating from the date the discounted
rate is disclosed any rate discounts reflected herein such that,
for the remaining term of this Agreement, Shipper shall be
required to pay Transporter the maximum applicable rate for
service, as well as all other charges, surcharges or direct bill
applicable to such service.
F. Except as provided above, all quantities associated with
Secondary Receipt Points, Secondary Delivery Points and Secondary
Routes under this Agreement will be at Maximum Tariff Rates plus
all other related fees, surcharges and fuel.
G. This Agreement may be assigned to an affiliate of Shipper
subject to the satisfaction of Transporter's credit requirements.
H. In addition, upon ninety (90) days prior notice, before each
contract year commences, Shipper may renominate the Maximum
Storage Quantity and the Maximum Withdrawal Transport volume
subject to the availability of capacity on Transporter's Pipeline
and a mutually acceptable rate, provided that the revenues from
the renominated service are equal to or greater than the revenues
that Transporter would have otherwise received if the service had
not changed from the previous contract year.
<PAGE>
Date: September 21, 1994 Contract No. 03050
I. Shipper agrees to waive its rights to release the capacity
underlying this Agreement.
J. Consistent with provisions of its Tariff, Transporter is
willing to contract on Shipper's behalf for capicity required on
third party transporters, or for other services to effectuate
Shipper's receipt of gas on third party facilities and delivery
of gas to Transporter's facilities.
Shipper must advise Transporter prior to commencement of
such third party transportation of its desire to have Transporter
act in such a capacity. Unless and until notified otherwise,
however, if Shipper submits a nomination to Transporter for the
transportation of gas from HIOS points of receipt, Shipper
understands and agrees that such nomination shall constitute
Shipper's request for Transporter to act in such capacity.
Shipper agrees to pay all charges related to such third
party transportation arrangements pursuant to Transporter's
Tariff.
K. To the extent Shipper desires to utilize receipt/delivery
points pursuant to Part 284 B (Section 311 of the NGPA and
Section 284.102 of the Commission's regulations), Shipper must
execute a separate agreement with Transporter and Shipper must
also certify that the transportation of gas will be on behalf of
either an "intrastate pipeline" or a "local distribution
company."
L. The complete agreement between Transporter and Shipper shall
consist of this ETS Agreement (No. 03050) and the following
agreements between Transporter and Shipper: FSS Agreement (No.
34050); September 28, 1994 Letter of Intent; and September 28,
1994 Operating Agreement.
9. OPERATIONAL FLOW ORDERS
Shipper hereby guarantees to Transporter that each contract it
has entered into in connection with the Gas to be transported
under this Agreement contains a provision that permits
Transporter to issue an effective Operational Flow Order pursuant
to Section 8 of the General Terms and Conditions. Shipper shall
also guarantee for any supply contract for Gas that is
transported via Viking Gas Transmission Company, that Transporter
shall be designated a third party beneficiary.
<PAGE>
Date: September 21, 1994 Contract No. 03050
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be signed by their respective Officers or Representatives
thereunto duly authorized to be effective as of the date stated
above.
The Peoples Gas
SHIPPER: Light and Coke Co. TRANSPORTER: ANR Pipeline Company
By: /s/ Thomas M. Patrick By: /s/ Wilbur Hitchcock
--------------------- ---------------------
Title: Vice President Title: Sr. Vice President
-------------- ------------------
Date: October 10, 1994 Date: October 6, 1994
----------------- ---------------
03050.ETS
<PAGE>
<TABLE>
<CAPTION>
PRIMARY ROUTE EXHIBIT Contract No. 03050
To Agreement Between Rate Schedule ETS
ANR Pipeline Company (Transporter) Contract Date: September 21, 1994
and The Peoples Gas Light and Coke Company (Shipper) Amendment Date:
Primary
Receipt/
Delivery Primary
Point Receipt Point MDQ
Number Name (Dth) Period
- ------ ---- ----- ------
<S> <C> <C> <C>
SOUTH WOODSTOCK or 21,997 SUMMER
WEST JOLIET (by displacement)
ANR Storage facilities
ANR STORAGE FACILITIES 75,000 WINTER
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRIMARY RECEIPT POINT EXHIBIT Contract No. 03050
To Agreement Between Rate Schedule ETS
ANR Pipeline Company (Transporter) Contract Date: September 21, 1994
and The Peoples Gas Light and Coke Company (Shipper) Amendment Date:
Primary
Receipt/
Delivery Primary
Point Receipt Point MDQ
Number Name (Dth) Period
- ------- ---- ---- ------
<S> <C> <C> <C>
ANR STORAGE FACILITIES 21,997 SUMMER
GROUP #1 75,000 WINTER
EAST JOLIET
BUSSE ROAD
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRIMARY DELIVERY POINT EXHIBIT Contract No. 03050
To Agreement Between Rate Schedule ETS
ANR Pipeline Company (Transporter) Contract Date: September 21, 1994
and The Peoples Gas Light and Coke Company (Shipper) Amendment Date:
Primary
Receipt/
Delivery Primary
Point Delivery Point MDQ
Number Name (Dth) Period
- ------ ---- ----- ------
<S> <C> <C> <C>
SOUTH WOODSTOCK or 21,997 SUMMER
WEST JOLIET (by displacement) -
ANR STORAGE FACILITIES - 75,000 WINTER
GROUP #1
</TABLE>
<PAGE>
Date: September 21, 1994 Contract No. 34050
FSS SERVICE AGREEMENT
This AGREEMENT is entered into by ANR Pipeline Company
(Transporter) and The Peoples Gas Light and Coke Company (Shipper)
WHEREAS, Shipper has requested Transporter to transport Gas on
its behalf and Transporter represents that it is willing to
transport Gas under the terms and conditions of this Agreement.
NOW, THEREFORE, Transporter and Shipper agree that the terms
below, together with the terms and conditions of Transporter's
applicable Rate Schedule and General Terms and Conditions of
Transporter's FERC Gas Tariff constitute the transportation
service to be provided and the rights and obligations of Shipper
and Transporter.
1. AUTHORITY FOR TRANSPORTATION SERVICE:
284G - Blanket
2. RATE SCHEDULE: Firm Storage Service (FSS)
3. CONTRACT QUANTITIES:
Contract Quantity - see Exhibit attached hereto.
Such Contract Quantities shall be reduced for scheduling
purposes, but not for billing purposes, by the Contract
Quantities that Shipper has released through Transporter's
capacity release program for the period of any release.
4. TERM OF AGREEMENT:
04/01/1995 to
03/31/2000
<PAGE>
Date: September 21, 1994 Contract No. 34050
5. RATES:
Maximum rates, charges, and fees shall be applicable for the
entitlements and quantities delivered pursuant to this Agreement
unless Transporter has advised Shipper in writing or by ANR
Xpedite that it has agreed otherwise.
It is further agreed that Transporter may seek authorization
from the Commission and/or other appropriate body at any time and
from time to time to change any rates, charges or other
provisions in the applicable Rate Schedule and General Terms and
Conditions of Transporter's FERC Gas Tariff, and Transporter
shall have the right to place such changes in effect in
accordance with the Natural Gas Act. This Agreement shall be
deemed to include such changes and any changes which become
effective by operation of law and Commission order. Nothing
contained herein shall be construed to deny Shipper any rights it
may have under the Natural Gas Act, including the right to
participate fully in rate or other proceedings by intervention or
otherwise to contest increased rates in whole or in part.
6. INCORPORATION BY REFERENCE
The provisions of Transporter's applicable Rate Schedule and
the General Terms and Conditions of Transporter's FERC Gas Tariff
are specifically incorporated herein by reference and made a part
hereof.
7. NOTICES:
All notices can be given by telephone or other electronic
means, however, such notice shall be confirmed in writing at the
addresses below or through ANR Xpedite. Shipper and Transporter
may change the addresses below by written notice to the other
without the necessity of amending this agreement:
TRANSPORTER:
ANR PIPELINE COMPANY
500 Renaissance Center
Detroit, Michigan 48243
Attentions: Gas Control (Nominations)
Volume Management (Statements)
Cash Control (Payments)
Customer Services and Business Administration
(All Other Matters)
<PAGE>
Date: September 21, 1994 Contract No. 34050
SHIPPER:
The Peoples Gas Light and Coke Company (Shipper Name)
--------------------------------------
122 S. Michigan Ave., Room 915 (Address)
------------------------------
Chicago, IL 60603 (City, State, Zip)
-------------------
Attention: Mr. Eckhard Blaumueller
-----------------------
Telephone: (312) 431-7057
--------------
Fax: (312) 431-4558
--------------
INVOICES AND STATEMENTS:
The Peoples Gas Light and Coke Company (Shipper Name)
--------------------------------------
122 S. Michigan Ave., Room 915 (Address)
------------------------------
Chicago, IL 60603 (City, State, Zip)
------------------
Attention: Mr. Eckhard Blaumueller
-----------------------
Telephone: (312) 431-7057
--------------
Fax: (312) 431-4558
--------------
NOMINATIONS:
The Peoples Gas Light And Coke Company (Shipper Name)
--------------------------------------
122 S. Michigan Ave., Room 915 (Address)
-----------------------------
Chicago, IL 60603 (City, State, Zip)
------------------
Attention: Mr. Jerry Slechta
-----------------
Telephone: (312) 431-4362
--------------
Fax: (312) 431-4558
--------------
Mechanical Dialing
Device No (s):-------------------------
<PAGE>
Date: September 21, 1994 Contract No. 34050
ALL OTHER MATTERS:
The Peoples Gas Light and Coke Company (Shipper Name)
--------------------------------------
122 S. Michigan Ave., Room 915 (Address)
------------------------------
Chicago, IL 60603 (City, State, Zip)
-------------------
Attention: Mr. Eckhard Blaumueller
-----------------------
Telephone: (312) 431-7057
--------------
Fax: (312) 431-4558
--------------
8. FURTHER AGREEMENT
A. For transportation under ETS Agreement (No. 03050) and
storage under FSS Agreement (No. 34050), Shipper shall pay a
single rate covering both the transportation and storage services
not to exceed, for each 12 month period, $0.90 times 3.75 BCF for
years one and two (April 1, 1995 through March 31, 1997) and for
years three through five (April 1, 1997 through March 31, 2000) a
rate not to exceed, for each 12 month period, $1.05 times 3.75
BCF. The aforementioned rates are inclusive of Volumetric
Buyout/Buydown, Dakota and Transition Costs. In addition,
Shipper will be charged ACA, applicable GRI, fuel and any other
related fees or surcharges.
B. For billing purposes, Transporter has discretion in
determining the portion of the rate to be assigned to
transportation and/or storage as well as the portion of the rate
to be assigned to Reservation and/or Commodity.
C. From time to time dependent upon Transporter's use percents,
the MDQ's and MSQ under ETS Agreement (No. 03050) and FSS
Agreement (No. 34050) will be adjusted to allow Shipper to
deliver and store sufficient fuel quantities to effectuate a 50
day storage withdrawal quantity of 75,000 dth at the specified
delivery points at no additional charge.
<PAGE>
Date: September 21, 1994 Contract No. 34050
D. Shipper can use the unused portion of its Primary Route MDQ
on a Secondary basis at the following receipt points at no
additional charge:
1. Joliet (NGPL)
2. Defiance (PEPL)
3. Joliet (Midwestern)
4. Shorewood (NIGAS) - (by displacement)
5. Kalkaska or Chester (Mich Con)
6. East Joliet (PGL&C) - (by displacement)
` 7. Elkhart (Trunkline)
8. Crystal Falls (GLGT)
E. Shipper and Transporter agree that the rates stated herein
shall be confidential and shall be maintained confidentially by
Shipper and Transporter. Shipper or Transporter may disclose
such rates only if such disclosure is required by law and Shipper
or Transporter requests confidential or privileged treatment
under applicable statutes, rules and regulations, and provides
reasonable notice to the other party prior to such disclosure.
Any unauthorized disclosure by Shipper of the rates stated herein
shall have the effect of terminating from the date the discounted
rate is disclosed any rate discounts reflected herein such that,
for the remaining term of this Agreement, Shipper shall be
required to pay Transporter the maximum applicable rate for
service, as well as all other charges, surcharges or direct bill
applicable to such service.
F. This Agreement may be assigned to an affiliate of Shipper
subject to the satisfaction of Transporter's credit requirements.
G. In addition, upon ninety (90) days prior notice, before each
contract year commences, Shipper may renominate the Maximum
Storage Quantity and the Maximum Withdrawal Transport volume
subject to the availability of capacity on Transporter's Pipeline
and a mutually acceptable rate, provided that the revenues from
the renominated service are equal to or greater than the revenues
that Transporter would have otherwise received if the service had
not changed from the previous contract year.
H. Shipper agrees to waive its rights to release the capacity
underlying this Agreement.
<PAGE>
Date: September 21, 1994 Contract No. 34050
I. Shipper agrees to waive its rights to in-field storage
transfers.
J. The complete agreement between Transporter and Shipper shall
consist of this FSS Agreement (No. 34050) and the following
agreements between Transporter and Shipper: ETS Agreement (No.
03050); September 28, 1994 Letter of Intent; and September 28,
1994 Operating Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be signed by their respective Officers or Representatives
thereunto duly authorized to be effective as of the date stated
above.
The Peoples Gas
SHIPPER: Light and Coke Co. TRANSPORTER: ANR Pipeline Company
By: /s/ Thomas M. Patrick By: /s/ Wilbur Hitchcock
---------------------- ---------------------
Title: Vice President Title: Sr. Vice President
--------------- ------------------
Date: October 10, 1994 Date: October 6, 1994
---------------- ---------------
34050.fss
<PAGE>
<TABLE>
<CAPTION>
CONTRACT QUANTITY EXHIBIT CONTRACT NO. 34050
TO AGREEMENT BETWEEN RATE SCHEDULE FSS
ANR PIPELINE COMPANY (TRANSPORTER) CONTRACT DATE: September 21, 1994
AND THE PEOPLES GAS LIGHT AND COKE COMPANY (SHIPPER) AMENDMENT DATE:
ANNUAL SERVICE
RETCHETED SERVICE
MDQ
(DTH)
------
<S> <C>
Maximum Storage Quantity (MSQ) 3,803,250
Base Maximum Daily Withdrawal Quantity (BMDWQ) 76,065
Base Maximum Daily Injection Quantity (BMDIQ) 21,733
</TABLE>
<PAGE>
EXHIBIT 10(c)
Contract No. 110654
NATURAL GAS PIPELINE COMPANY OF AMERICA (NATURAL)
STORAGE RATE SCHEDULE NSS
AGREEMENT
DATED October 19, 1995
1. SHIPPER is: THE PEOPLES GAS LIGHT & COKE COMPANY, a LOCAL DISTRIBUTION
COMPANY
2. (a) MDQ totals: 128,572 MMBtu per day.
(b) MSV totals: 9,642,900 MMBtu.
3. TERM: December 01, 1995 through March 31, 1998
4. [ ] This Agreement supersedes and cancels a ______ Agreement dated ______
[ ] Capacity rights for this Agreement were released from Natural's
Transportation Rate Schedule Agreement (KT #) dated and are subject to any
recall/return provisions in Natural's Capacity Release Package ID #.
[ ] [for firm service only] Service and reservation charges commence the
latter of:
(a) December 01, 1995, and
(b) the date capacity to provide the service hereunder is available on
Natural's System.
[X] Other: This is a partial conversion from Shipper's S-1 Agreement No.
250008 dated November 30, 1990 and LS-2 Agreement No. 250015 dated March
14, 1990.
5. SHIPPER'S ADDRESSES NATURAL'S ADDRESSES
GENERAL CORRESPONDENCE:
THE PEOPLES GAS LIGHT & Natural Gas Pipeline Company of America
COKE COMPANY Attention: Gas Transportation Services
WILLIAM MORROW 3200 Southwest Freeway 77027-7523
130 E. RANDOLPH DR. P.O. Box 283 77001-0283
CHICAGO, IL 60601 Houston, Texas
STATEMENTS/INVOICES/ACCOUNTING RELATED MATERIALS:
THE PEOPLES GAS LIGHT & Natural Gas Pipeline Company of America
COKE COMPANY Attention: Gas Accounting Department
ANTHONY COMPTON 701 East 22nd Street
130 E. RANDOLPH DR. Lombard, Illinois 60148
CHICAGO, IL 60601
PAYMENTS:
Natural Gas Pipeline Company of America
Attention: Controller
701 East 22nd Street
Lombard, Illinois 60148
<PAGE>
6. The above stated Rate Schedule, as revised from time to time, controls this
Agreement and is incorporated herein. NATURAL GAS PIPELINE COMPANY OF
AMERICA AND SHIPPER ACKNOWLEDGE THAT THIS AGREEMENT IS SUBJECT TO THE
PROVISIONS OF Natural's FERC GAS TARIFF AND APPLICABLE FEDERAL LAW. TO THE
EXTENT THAT STATE LAW IS APPLICABLE, Natural AND SHIPPER EXPRESSLY AGREE
THAT THE LAWS OF THE STATE OF ILLINOIS SHALL GOVERN THE VALIDITY,
CONSTRUCTION, INTERPRETATION AND EFFECT OF THIS CONTRACT, EXCLUDING,
HOWEVER, ANY CONFLICT OF LAWS RULE WHICH WOULD APPLY THE LAW OF ANOTHER
STATE. This Agreement states the entire agreement between the parties and
no waiver, representation, or agreement shall affect this Agreement unless
it is in writing.
AGREED TO BY:
NATURAL GAS PIPELINE COMPANY OF THE PEOPLES GAS LIGHT & COKE
AMERICA COMPANY
"Natural" "Shipper"
By: /S/ Stephen G. Weinan By: /S/ T. M. Patrick
--------------------- -----------------
Name: Stephen G. Weinan Name: Thomas M. Patrick
------------------ -------------------
Title: Attorney in fact Title: Vice President
---------------- --------------
<PAGE>
EXHIBIT 10(d)
Contract No. 110655
NATURAL GAS PIPELINE COMPANY OF AMERICA (Natural)
TRANSPORTATION RATE SCHEDULE FTS AGREEMENT DATED October 19,1995
UNDER SUBPART G of Part 284 OF THE FERC'S REGULATIONS
1. SHIPPER is: THE PEOPLES GAS LIGHT & COKE COMPANY, a LOCAL DISTRIBUTION
COMPANY
2. (a) MDQ totals: 90,000 MMBTU per day.
(b) Service option selected (Check any or all):
[X] LN [ ] SW [ X] NB
3. TERM: December 01, 1995 through March 31, 1998
4. Service will be ON BEHALF OF: [x] shipper or [] Other:
5. The ULTIMATE END USERS are customers within any state in the
continental U.S.; or (specify state)
- ---------------------------------------------------------------
6. [] This Agreement supersedes and cancels a Agreement dated
------- ------
[] Capacity rights for this Agreement were released from Natural's
Transportation Rate Schedule Agreement (KT#) dated and are subject to
any recall/return provisions in Natural's Capacity Release Package ID #.
[X] [for firm service only] Service and reservation charges commence
the latter of:
(a) December 01, 1995, and
(b) the date capacity to provide the service hereunder is available on
Natural's System.
[ ] Other:
--------------------------------------------
7. SHIPPER'S ADDRESSES NATURAL'S ADDRESSES
GENERAL CORRESPONDENCE:
THE PEOPLES GAS LIGHT & COKE COMPANY Natural Gas Pipeline Company of America
WILLIAM MORROW Attention: Gas Transportation Services
130 E RANDOLPH DRIVE 3200 Southwest Freeway 77027-7523
CHICAGO IL, 60601 P. O. Box 77001-0283
Houston, Texas
STATEMENTS/INVOICES/ACCOUNTING RELATED MATERIALS:
THE PEOPLES GAS LIGHT & COKE COMPANY Natural Gas Pipeline Company of America
ANTHONY COMPTON Attention: Gas Accounting Department
130 E RANDOLPH DRIVE 701 East 22nd Street
CHICAGO IL, 60601 Lombard, Illinois 60148
PAYMENTS:
Natural Gas Pipeline Company of America
Attention: Controller
701 East 22nd Street
Lombard, Illinois 60148
<PAGE>
8. The above stated Rate Schedule, as revised from time to time,
controls this Agreement and is incorporated herein. The attached
Exhibits A, B, and C (for firm service only) are a part of this
Agreement. Natural AND SHIPPER ACKNOWLEDGE THAT THIS AGREEMENT
IS SUBJECT TO THE PROVISIONS OF Natural'S FERC GAS TARIFF AND
APPLICABLE FEDERAL LAW. TO THE EXTENT THAT STATE LAW IS
APPLICABLE, Natural AND SHIPPER EXPRESSLY AGREE THAT THE LAWS OF
THE STATE OF ILLINOIS SHALL GOVERN THE VALIDITY, CONSTRUCTION,
INTERPRETATION AND EFFECT OF THIS CONTRACT, EXCLUDING, HOWEVER,
ANY CONFLICT OF LAWS RULE WHICH WOULD APPLY THE LAW OF ANOTHER
STATE. This Agreement states the entire agreement between the
parties and no waiver, representation, or agreement shall affect
this Agreement unless it is writing. Shipper shall provide the
actual end user purchaser name (s) to Natural if Natural must
provide them to FERC.
AGREED TO BY:
NATURAL GAS PIPELINE COMPANY OF AMERICA THE PEOPLES GAS LIGHT &
"Natural" COKE COMPANY
"Shipper"
By: /s/ Stephen G. Weinan By: /s/ T. M. Patrick
----------------------------- -----------------
Name: Stephen G. Weinan Name: Thomas M. Patrick
--------------------------- -----------------
Title: Attorney in fact Title: Vice President
--------------------------- ----------------
<PAGE>
EXHIBIT A
DATED: October 19, 1995
EFFECTIVE DATE: December 01, 1995
COMPANY: THE PEOPLES GAS LIGHT & COKE COMPANY
CONTRACT: 110655
RECEIPT POINT/S
<TABLE>
<CAPTION>
County/Parish PIN MDQ
Name/Location Area State No. Zone (MMBtu/d)
- ------------- --------------- ----- --- ----- ---------
<S> <C> <C> <C> <C> <C>
PRIMARY RECEIPT POINT/S
1. NGCENRGY/NGPL MAUD MILLER MILLER AR 3844 08 90000
INTERCONNECT WITH NGC-ENERGY ON TRANSPORTER'S
MAUD LATERAL IN SEC.
33-T17S-R28W, MILLER COUNTY, ARKANSAS.
</TABLE>
SECONDARY RECEIPT POINT/S
All secondary receipt point, and the related priorities and
volumes, as provided under the Tariff provisions governing this
Agreement.
RECEIPT PRESSURE, ASSUMED ATMOSPHERIC PRESSURE
Natural gas to be delivered to Natural at the Receipt Point/s
shall be at a delivery pressure sufficient to enter Natural's
pipeline facilities at the pressure maintained from time to time,
but Shipper shall not deliver gas at a pressure in excess of the
Maximum Allowable Pressure (MAOP) stated for each Receipt Point.
The measuring party shall use or cause to be used an assumed
atmospheric pressure corresponding to the elevation at such
Receipt Point/s.
RATES
Except as provided to the contrary in any written agreement(s)
between the parties in effect during the term hereof, Shipper
shall pay Natural the maximum rate and all other lawful charges
as specified in Natural's applicable rate schedule.
FUEL GAS AND GAS LOST AND UNACCOUNTED FOR PERCENTAGE (%)
Shipper will be assessed the applicable percentage for Fuel Gas
and Gas Lost and Unaccounted For.
<PAGE>
EXHIBIT A (CONT'D)
DATED October 19, 1995
EFFECTIVE DATE: December 01, 1995
COMPANY: THE PEOPLES GAS LIGHT & COKE COMPANY
CONTRACT: 110655
TRANSPORTATION OF LIQUIDS
Transportation of liquids may occur at permitted points
identified in Natural's current Catalog of Receipt and Delivery
Points, but only if the parties execute a separate liquids
agreement.
<PAGE>
EXHIBIT B
DATED October 19, 1995
EFFECTIVE DATE: December 01, 1995
COMPANY: THE PEOPLES GAS LIGHT & COKE COMPANY
CONTRACT: 110655
DELIVERY POINT/S
<TABLE>
<CAPTION>
County/Parish PIN MDQ
Name/Location Area State No. Zone (MMBtu/d)
- --------------------- -------------- ------ ---- ---- ---------
<S> <C> <C> <C> <C> <C>
PRIMARY DELIVERY POINT/S
1. NO SHORE/NGPL GRAYSLAKE LAKE LAKE IL 1 06 45000
INTERCONNECT WITH NORTH SHORE GAS
COMPANY LOCATED IN SEC. 12-T44N-R10E,
LAKE COUNTY, ILLINOIS.
2. PGLC/NGPL ROGERS PARK COOK COOK IL 4174 06 45000
INTERCONNECT WITH THE PEOPLES GAS
LIGHT AND COKE COMPANY ON TRANSPORTER'S
HOWARD STREET LINE IN SEC. 36-T41N-R13E,
COOK COUNTY, ILLINOIS.
</TABLE>
SECONDARY DELIVERY POINT/S
All secondary delivery points, and the related priorities and
volumes, as provided under the Tariff provisions governing this
Agreement.
DELIVERY PRESSURE, ASSUMED ATMOSPHERIC PRESSURE
Natural gas to be delivered by Natural to Shipper, or for
Shipper's account, at the Delivery Point/s shall be at the
pressure available in Natural's pipeline facilities from time to
time. The measuring party shall use or cause to be used an
assumed atmospheric pressure corresponding to the elevation at
such Delivery Point/s.
<PAGE>
EXHIBIT C
DATED October 19, 1995
EFFECTIVE DATE: December 01, 1995
COMPANY: THE PEOPLES GAS LIGHT & COKE COMPANY
CONTRACT: 110655
Pursuant to Natural's tariff, an MDQ exists for each primary
transportation path segment and direction under the Agreement.
Such MDQ is the maximum daily quantity of gas which Natural is
obligated to transport on a firm basis along a primary
transportation path segment.
A primary transportation path segment is the path between a
primary receipt, delivery, or node point and the next primary
receipt, delivery, or node point. A node point is the point of
interconnection between two or more of Natural's pipeline
facilities.
A segment is a section of Natural's pipeline system designated by
a segment number whereby the Shipper under the terms of their
agreement based on the points within the segment identified on
Exhibit C has throughput capacity rights.
The segment numbers listed on Exhibit C reflect this Agreement's
path corresponding to Natural's most recent Pipeline System Map
which identifies segments and their corresponding numbers. All
information provided in this Exhibit C is subject to the actual
terms and conditions of Natural's Tariff.
<PAGE>
EXHIBIT C
DATED October 19, 1995
EFFECTIVE DATE: December 01, 1995
COMPANY: THE PEOPLES GAS LIGHT & COKE COMPANY
CONTRACT: 110655
<TABLE>
<CAPTION>
Segment Upstream Forward/Backward Flow Through
Number Segment Haul (Contractual) Capacity
- -------- --------- ------------------ -------------
<S> <C> <C> <C>
27 0 F 0
28 27 F 90000
30 28 F 45000
39 40 F 45000
40 28 F 45000
</TABLE>
<PAGE>
EXHIBIT 10(e)
Contract No. 110383
NATURAL GAS PIPELINE COMPANY OF AMERICA (NATURAL)
STORAGE RATE SCHEDULE DSS
AGREEMENT DATED December 01, 1995
1. SHIPPER is: THE PEOPLES GAS LIGHT & COKE COMPANY, a LOCAL
DISTRIBUTION COMPANY
2. (a) MDQ totals: 248,000 MMBtu per day.
(b) MSV totals: 12,400,000 MMBtu.
(c) The primary Delivery Point(s) and associated MDQ(s) are
contained in Exhibit B attached hereto and are a part of this
Agreement.
3. TERM: December 01, 1995 through March 31, 1998
4. [X] This Agreement supersedes and cancels a S-1 Agreement
No. 250008 dated November 30, 1990 and a LS-2 Agreement No.
250015 dated March 14, 1990.
[] Capacity rights for this Agreement were released from
Natural's Transportation Rate Schedule Agreement (KT #) dated and
are subject to any recall/return provisions in Natural's Capacity
Release Package ID #.
[] Service and reservation charges commence the latter of:
(a) December 01, 1995, and
(b) the date capacity to provide the service hereunder
is available on Natural's System.
[] Other:-------------------------------------------
5. SHIPPER'S ADDRESSES NATURAL's ADDRESSES
GENERAL CORRESPONDENCE:
THE PEOPLES GAS LIGHT & COKE COMPANY NATURAL GAS PIPELINE OF AMERICA
WILLIAM MORROW Attention: Gas Transportation Services
130 E. RANDOLPH DR. 3200 Southwest Freeway 77027-7523
CHICAGO, IL 60601 P.O. Box 283 77001-0283
Houston, Texas
STATEMENTS/INVOICES/ACCOUNTING RELATED MATERIALS:
THE PEOPLES GAS LIGHT & COKE COMPANY NATURAL GAS PIPELINE OF AMERICA
ANTHONY COMPTON Attention: Gas Accounting Department
130 E. RANDOLPH DR. 701 East 22nd Street
CHICAGO, IL 60601 Lombard, Illinois 60148
PAYMENTS:
NATURAL GAS PIPELINE OF AMERICA
Attention: Controller
701 East 22nd Street
Lombard, Illinois 60148
<PAGE>
6. The above-stated Rate Schedule, as revised from time to
time, controls this Agreement and is incorporated herein.
NATURAL GAS PIPELINE COMPANY OF AMERICA AND SHIPPER ACKNOWLEDGE
THAT THIS AGREEMENT IS SUBJECT TO THE PROVISIONS OF Natural's
FERC GAS TARIFF AND APPLICABLE FEDERAL LAW. TO THE EXTENT THAT
STATE LAW IS APPLICABLE, Natural AND SHIPPER EXPRESSLY AGREE THAT
THE LAWS OF THE STATE OF ILLINOIS SHALL GOVERN THE VALIDITY,
CONSTRUCTION, INTERPRETATION AND EFFECT OF THIS CONTRACT,
EXCLUDING, HOWEVER, ANY CONFLICT OF LAWS RULE WHICH WOULD APPLY
THE LAW OF ANOTHER STATE. This Agreement states the entire
agreement between the parties and no waiver, representation, or
agreement shall affect this Agreement unless it is in writing.
AGREED TO BY:
NATURAL GAS PIPELINE COMPANY OF AMERICA THE PEOPLES GAS LIGHT & COKE COMPANY
"Natural" "Shipper"
By: /s/ Gary R. Bartlett By: /s/ T. M. Patrick
---------------------- --------------------
Name: Gary R. Bartlett Name: Thomas M. Patrick
---------------------- --------------------
Title: Exec. Vice President Title: Vice President
---------------------- ---------------------
<PAGE>
EXHIBIT B
DATED December 01, 1995
EFFECTIVE DATE: December 01, 1995
COMPANY: THE PEOPLES GAS LIGHT & COKE COMPANY
CONTRACT: 110383
<TABLE>
<CAPTION>
DELIVERY POINT/S
County/Parish PIN MDQ
Name/Location Area State No. Zone (MMBTU)
- ------------- -------------- ----- ---- ---- -------
<S> <C> <C> <C> <C> <C>
PRIMARY DELIVERY POINT/S
1. NO SHORE/NGPL GRAYSLAKE LAKE LAKE IL 1 06 43507
INTERCONNECT WITH NORTH SHORE GAS
COMPANY LOCATED IN SEC. 12-T44N-R10E,
LAKE COUNTY, ILLINOIS.
2.PGLC/NGPL ROGERS PARK COOK COOK IL 4174 06 204493
INTERCONNECT WITH THE PEOPLES GAS
LIGHT AND COKE COMPANY ON TRANSPORTER'S
HOWARD STREET LINE IN SEC. 36-T41N-R13E,
COOK, COUNTY, ILLINOIS.
</TABLE>
SECONDARY DELIVERY POINT/S
All secondary delivery points, and the related priorities and
volumes, as provided under the Tariff provisions governing this
Agreement.
DELIVERY PRESSURE, ASSUMED ATMOSPHERIC PRESSURE
Natural gas to be delivered by Natural to Shipper, or for
Shipper's account, at the Delivery Point/s shall be at the
pressure available in Natural's pipeline facilities from time to
time. The measuring party shall use or cause to be used an
assumed atmospheric pressure corresponding to the elevation at
such Delivery Point/s.
<PAGE>
EXHIBIT 10(f)
Contract No. 110381
NATURAL GAS PIPELINE COMPANY OF AMERICAN (Natural)
TRANSPORTATION RATE SCHEDULE FTS AGREEMENT DATED December 01, 1995
UNDER SUBPART G of Part 284 OF THE FERC'S REGULATIONS
1. SHIPPER is: THE PEOPLES GAS LIGHT & COKE COMPANY, a LOCAL DISTRIBUTION
COMPANY
2. (a) MDQ totals: 210,000 MMBTU per day.
(b) Service option selected (check any or all):
[ ] LN [ ] SW [ ] NB
3. TERM: December 01, 1995 through November 30, 1998
4. Service will be ON BEHALF OF: [x] Shipper or [ ] Other:
5. The ULTIMATE END USERS are customers within any state in the continental
U.S.; or (specify state)
- ------------------------------------------------------------------------
6. [ ] This Agreement supersedes and cancels a________ Agreement
dated ______
[ ] Capacity rights for this Agreement were released from Natural's
Transportation Rate Schedule Agreement (KT#) dated and are subject to any
recall/return provisions in Natural's Capacity Release Package ID #.
[X] [for firm service only] Service and reservation charges commence the
latter of:
(a) December 01, 1995, and
(b) the date capacity to provide the service hereunder is available on
Natural's System.
[ ] Other: ____________________________________
7. SHIPPER'S ADDRESSES NATURAL'S ADDRESSES
GENERAL CORRESPONDENCE:
THE PEOPLES GAS LIGHT & COKE COMPANY NATURAL GAS PIPELINE COMPANY OF AMERICA
WILLIAM MORROW Attention: Gas Transportation Services
130 E RANDOLPH DRIVE 3200 Southwest Freeway 77027-7523
CHICAGO, IL 60601 P. O. Box 77001-0283
Houston, Texas
STATEMENTS/INVOICES/ACCOUNTING RELATED MATERIALS:
THE PEOPLES GAS LIGHT & COKE COMPANY NATURAL GAS PIPELINE COMPANY OF AMERICA
ANTHONY COMPTON Attention: Gas Accounting Department
130 E RANDOLPH DRIVE 701 East 22nd Street
CHICAGO IL, 60601 Lombard, Illinois 60148
PAYMENTS:
NATURAL GAS PIPELINE COMPANY OF AMERICA
Attention: Controller
701 East 22nd Street
Lombard, Illinois 60148
<PAGE>
8. The above stated Rate Schedule, as revised from time to time, controls this
Agreement and is incorporated herein. The attached Exhibits A, B, and C (for
firm service only) are a part of this Agreement. Natural AND SHIPPER
ACKNOWLEDGE THAT THIS AGREEMENT IS SUBJECT TO THE PROVISIONS OF Natural'S FERC
GAS TARIFF AND APPLICABLE FEDERAL LAW. TO THE EXTENT THAT STATE LAW IS
APPLICABLE, Natural AND SHIPPER EXPRESSLY AGREE THAT THE LAWS OF THE STATE OF
ILLINOIS SHALL GOVERN THE VALIDITY, CONSTRUCTION, INTERPRETATION AND EFFECT OF
THIS CONTRACT, EXCLUDING, HOWEVER, ANY CONFLICT OF LAWS RULE WHICH WOULD APPLY
THE LAW OF ANOTHER STATE. This Agreement states the entire agreement between
the parties and no waiver, representation, or agreement shall affect this
Agreement unless it is in writing. Shipper shall provide the actual end user
purchaser name(s) to Natural if Natural must provide them to FERC.
AGREED TO BY:
NATURAL GAS PIPELINE COMPANY OF AMERICA THE PEOPLES GAS LIGHT &
"Natural" COKE COMPANY
"Shipper"
By: /s/ Gary R. Bartlett By: /s/ T. M. Patrick
----------------------------- --------------------
Name: Gary R. Bartlett Name: Thomas M. Patrick
---------------------------- ------------------
Title: Exec. Vice President Title: Vice President
------------------------- -----------------
<PAGE>
DATED: December 01, 1995
EFFECTIVE DATE: December 01, 1995
COMPANY: THE PEOPLES GAS LIGHT & COKE COMPANY
CONTRACT: 110381
RECEIPT POINT/S
County/Parish PIN MDQ
Name/Location Area State No. Zone (MMBtu/d)
- ------------- ------------ ----- ---- ---- ---------
PRIMARY RECEIPT POINT/S
1. NNG/NGPL MILLS MILLS IA 203 07 146071
INTERCONNECT WITH NORTHERN NATURAL
GAS COMPANY IN SEC. 26-T72N-R43W,
MILLS COUNTY, IOWA.
2. N BORDER/NGPL HARPER KEOKUK KEOKUK IA 8090 09 63929
INTERCONNECT WITH NORTHERN BORDER
PIPELINE COMPANY ON TRANSPORTER'S
AMARILLO MAINLINE IN SEC. 30-T76N-R10W,
KEOKUK COUNTY, IOWA.
SECONDARY RECEIPT POINT/S
All secondary receipt point, and the related priorities and volumes, as provided
under the Tariff provisions governing this Agreement.
RECEIPT PRESSURE, ASSUMED ATMOSPHERIC PRESSURE
Natural gas to be delivered to Natural at the Receipt Point/s shall be at a
delivery pressure sufficient to enter Natural's pipeline facilities at the
pressure maintained from time to time, but Shipper shall not deliver gas at a
pressure in excess of the Maximum Allowable Operating Pressure (MAOP) stated for
each Receipt Point. The measuring party shall use or cause to be used an
assumed atmospheric pressure corresponding to the elevation at such Receipt
Point/s.
RATES
Except as provided to the contrary in any written agreement(s) between the
parties in effect during the term hereof, Shipper shall pay Natural the maximum
rate and all other lawful charges as specified in Natural's applicable rate
schedule.
FUEL GAS AND GAS LOST AND UNACCOUNTED FOR PERCENTAGE (%)
Shipper will be assessed the applicable percentage for Fuel Gas and Gas Lost and
Unaccounted For.
<PAGE>
DATED December 01, 1995
EFFECTIVE DATE: December 01, 1995
COMPANY: THE PEOPLES GAS LIGHT & COKE COMPANY
CONTRACT: 110381
TRANSPORTATION OF LIQUIDS
Transportation of liquids may occur at permitted points identified in
Natural's current Catalog of Receipt and Delivery Points, but only if the
parties execute a separate liquids agreement.
<PAGE>
DATED December 01, 1995
EFFECTIVE DATE: December 01, 1995
COMPANY: THE PEOPLES GAS LIGHT & COKE COMPANY
CONTRACT: 110381
DELIVERY POINT/S
County/Parish PIN MDQ
Name/Location Area State No. Zone (MMBtu/d)
- ------------- ------------- ----- ---- ---- ---------
PRIMARY DELIVERY POINT/S
1. NO SHORE/NGPL GRAYSLAKE LAKE LAKE IL 1 06 60000
INTERCONNECT WITH NORTH SHORE GAS
COMPANY LOCATED IN SEC. 12-T44N-R10E,
LAKE COUNTY, ILLINOIS.
2. PGLC/NGPL ROGERS PARK COOK COOK IL 4174 06 150000
INTERCONNECT WITH THE PEOPLES GAS
LIGHT AND COKE COMPANY ON TRANSPORTER'S
HOWARD STREET LINE IN SEC. 36-T41N-R13E,
COOK, COUNTY, ILLINOIS.
SECONDARY DELIVERY POINT/S
All secondary delivery points, and the related priorities and volumes, as
provided under the Tariff provisions governing this Agreement.
DELIVERY PRESSURE, ASSUMED ATMOSPHERIC PRESSURE
Natural gas to be delivered by Natural to Shipper, or for Shipper's account, at
the Delivery Point/s shall be at the pressure available in Natural's pipeline
facilities from time to time. The measuring party shall use or cause to be used
an assumed atmospheric pressure corresponding to the elevation at such Delivery
Point/s.
<PAGE>
DATED December 01,1995
EFFECTIVE DATE: December 01, 1995
COMPANY: THE PEOPLES GAS LIGHT & COKE COMPANY
CONTRACT: 110381
Pursuant to Natural's tariff, an MDQ exists for each primary transportation path
segment and direction under the Agreement. Such MDQ is the maximum daily
quantity of gas which Natural is obligated to transport on a firm basis along a
primary transportation path segment.
A primary transportation path segment is the path between a primary receipt,
delivery, or node point and the next primary receipt, delivery, or node point.
A node point is the point of interconnection between two or more of Natural's
pipeline facilities.
A segment is a section of Natural's pipeline system designated by a segment
number whereby the Shipper under the terms of their agreement based on the
points within the segment identified on Exhibit C has throughput capacity
rights.
The segment numbers listed on Exhibit C reflect this Agreement's path
corresponding to Natural's most recent Pipeline System Map which identifies
segments and their corresponding numbers. All information provided in this
Exhibit C is subject to the actual terms and conditions of Natural's Tariff.
<PAGE>
DATED December 01, 1995
EFFECTIVE DATE: December 01, 1995
COMPANY: THE PEOPLES GAS LIGHT & COKE COMPANY
CONTRACT: 110381
Segment Upstream Forward/Backward Flow Through
Number Segment Haul (Contractual) Capacity
- ------- -------- ------------------ ------------
13 0 F 0
14 13 F 146071
29 14 F 60000
30 14 F 150000
37 29 F 60000
39 37 F 60000
<PAGE>
EXHIBIT 10(g)
RATE SCHEDULE FT
FIRM TRANSPORTATION SERVICE
FORM OF SERVICE AGREEMENT
CONTRACT NO. T-FTS-013965
------------
THIS AGREEMENT is made effective as of the 1st day of April, 1995, by and
between:
TRUNKLINE GAS COMPANY, (hereinafter called "Trunkline"), a Delaware Corporation,
and
THE PEOPLES GAS LIGHT AND COKE COMPANY
(hereinafter called "Shipper").
Shipper represents and warrants that Shipper conforms to the requirements of 18
C.F.R.
Section 284.102 (284B - Intrastate Pipelines or
Local Distribution Companies) ---------------
Section 284.222 (284G - Interstate Pipelines)
---------------
Section 284.223 (284G - Others) X
---------------
In consideration of the mutual covenants and agreements as herein set forth,
both Trunkline and Shipper covenant and agree as follows:
ARTICLE 1 - SERVICE
Trunkline agrees to receive at the Points of Receipt and deliver at the Points
of Delivery, on a firm basis, Quantities of Natural Gas up to the following
daily Quantity (Dt), which shall constitute the Maximum Daily Quantity:
118,000 (Dt).
---------
The Maximum Daily Quantity is stated in delivered Quantities, for which received
Quantities must be adjusted for fuel usage and lost or unaccounted for Gas as
set out in the then-effective, applicable rates and charges under Trunkline's
Rate Schedule FT.
<PAGE>
RATE SCHEDULE FT (Continued)
FIRM TRANSPORTATION SERVICE
FORM OF SERVICE AGREEMENT
Exhibit A hereto states the Points of Receipt and Points of Delivery. Exhibit A
may be revised from time to time by written agreement between Trunkline and
Shipper and, as may be revised, is by this reference incorporated in its
entirety into this Agreement and made an integral part hereof. Shipper's
Maximum Daily Quantity shall be assigned among the primary Points of Receipt set
out on Exhibit A, as well as among the primary Points of Delivery set out on
Exhibit A. Such assignment may be changed, subject to the availability of
capacity, in accordance with the General Terms and Conditions.
ARTICLE 2 - TERM
The term of this Agreement shall commence on April 1, 1995 and shall remain
effective for a primary term of 67 months and thereafter shall continue in
effect until terminated by Trunkline or Shipper upon at least six (6) months
prior written notice by certified mail to the other, as of any date not earlier
than the date of expiration of the primary term, provided that the term of this
Agreement shall be subject to applicable provisions of Section 11 of the General
Terms and Conditions.
Trunkline shall have the right to terminate service hereunder in the following
circumstances: (1) if 18 C.F.R., Part 284 of the Commission's Regulations in
effect on the date stated above is stayed, modified or overturned by an
appellate court or by the Commission in response to the order of an appellate
court; (2) if Trunkline terminates self-implementing transportation under
Section 311 of the NGPA or Section 7 (c) of the Natural Gas Act on a general,
non-discriminatory basis; or (3) pursuant to any effective provisions for
termination of this Agreement by Trunkline as stated in Rate Schedule FT or the
General Terms and Conditions.
ARTICLE 3 - RATES AND CHARGES
For the services provided or contracted for hereunder, Shipper agrees to pay
Trunkline the then-effective, applicable rates and charges under Trunkline's
Rate Schedule FT filed with the Commission, as such rates and charges and
Schedule FT may hereafter be modified, supplemented, superseded, or replaced
generally or as to the service hereunder. Trunkline reserves the right from
time to time to unilaterally file and to make effective any such changes in the
terms or rate levels under Rate Schedule FT and the applicability thereof, the
General Terms and Conditions or any other provisions of Trunkline's Tariff,
subject to the applicable provisions of the Natural Gas Act and the Commission's
Regulations thereunder.
<PAGE>
RATE SCHEDULE FT (Continued)
FIRM TRANSPORTATION SERVICE
FORM OF SERVICE AGREEMENT
ARTICLE 4 - FUEL REIMBURSEMENT
In addition to collection of the rates and charges provided for in Article 3,
Trunkline shall retain, as Fuel Reimbursement, the percentage of the Quantities
delivered to Shipper hereunder, as provided pursuant to Rate Schedule FT.
ARTICLE 5 - GENERAL TERMS AND CONDITIONS
This Agreement and all terms for service hereunder are subject to the further
provisions of Rate Schedule FT and the General Terms and Conditions of
Trunkline's Tariff, as such may be modified, supplemented, superseded or
replaced generally or as to the service hereunder. Trunkline reserves the right
from time to time to unilaterally file and to make effective any such changes in
the provisions of Rate Schedule FT and the General Terms and Conditions, subject
to the applicable provisions of the Natural Gas Act and the Commission's
Regulations thereunder. Such Rate Schedule and General Terms and Conditions, as
may be changed from time to time, are by this reference incorporated in their
entirety into this Agreement and made an integral part hereof.
ARTICLE 6 - CANCELLATION OF PREVIOUS CONTRACTS
This Agreement supersedes, cancels, and terminates, as of the date(s) stated
below, the following Agreement(s) (if any) with respect to the Transportation of
Natural Gas between Trunkline and Shipper:
<PAGE>
RATE SCHEDULE FT (Continued)
FIRM TRANSPORTATION SERVICE
FORM OF SERVICE AGREEMENT
IN WITNESS WHEREOF, both Trunkline and Shipper have caused this Agreement to be
executed in several counterparts by their respective officers or other persons
duly authorized to do so.
THE PEOPLES GAS LIGHT AND COKE COMPANY
By: /s/ Thomas M. Patrick
---------------------
Title: Vice President
--------------
EXECUTED
----------------
TRUNKLINE GAS COMPANY
By: /s/ G. Rana
-----------
Title:
--------------------------
EXECUTED
-----------------------
<PAGE>
RATE SCHEDULE FT (Continued)
FIRM TRANSPORTATION SERVICE
FORM OF SERVICE AGREEMENT
EXHIBIT A
Transportation Agreement
For
Firm Service
Under Rate Schedule FT
Primary Points of Delivery
Seq. Meter
No. Delivered To Location County State No. MDDO
- --- ------------ -------- ------ ----- ----- -----
1 PEOPLES GAS (MANLO 09 21N 07E CHAMPA IL 80601 60000
2 CONSUMERS POWER 11 38N 07E ELKHAR IN 80001 58000
Description of Facilities
Atmos.
Seq. Existing/ Operated and Pres.
No. Proposed Zone Maintained by (Psia)
- --- -------- ---- ------------- ------
1 EXISTING Z-2 TRUNKLINE GAS 14.40
2 EXISTING Z-2 TRUNKLINE GAS 14.40
Secondary Points of Delivery
Shipper shall have the secondary Points of Delivery as set forth in Section 2.3
of Trunkline's Rate Schedule FT.
<PAGE>
RATE SCHEDULE FT (Continued)
FIRM TRANSPORTATION SERVICE
FORM OF SERVICE AGREEMENT
EXHIBIT A
Transportation Agreement
For
Firm Service
Under Rate Schedule FT
Primary Points of Receipt
MDRO
Seq. Meter (Net of Fuel
No. Received From Location County State No. Reimbursement)
- --- ------------- -------- ------- ----- ----- --------------
1 AGIP (GI 102) GI 102 OFFSHO LA 82564 50000
2 AMERADA HESS ST 20 S TIM 175 OFFSHO LA 82507 50000
3 NORCEN (SMI 268) SMI268 OFFSHO LA 80416 18000
Description of Facilities
Atmos.
Seq. Existing/ Operated and Pres.
No. Proposed Zone Maintained by (Psia)
- --- -------- ---- ------------- ------
1 EXISTING FLD TRUNKLINE GAS
2 EXISTING FLD TRUNKLINE GAS 14.70
3 EXISTING FLD TRUNKLINE GAS 14.70
Secondary Points of Receipt
Shipper shall have the secondary Points of Receipt as set forth in Section 2.2
of Trunkline's Rate Schedule FT.
<PAGE>
RATE SCHEDULE QNT
QUICK NOTICE TRANSPORTATION SERVICE
FORM OF SERVICE AGREEMENT
CONTRACT NO. QNT-013966
THIS AGREEMENT is made effective as of the 1st day of December, 1995, by and
between:
TRUNKLINE GAS COMPANY, (hereinafter called "Trunkline"), a Delaware Corporation,
and
THE PEOPLES GAS LIGHT AND COKE COMPANY
(hereinafter called "Shipper").
Shipper represents and warrants that Shipper conforms to the requirements of 18
C.F.R.
Section 284.102 (284B - Intrastate Pipelines or
Local Distribution Companies)
--------------
Section 284.222 (284G - Interstate Pipelines)
--------------
Section 284.223 (284G - Others) X
--------------
In consideration of the mutual covenants and agreements as herein set forth,
both Trunkline and Shipper covenant and agree as follows:
ARTICLE 1 - SERVICE
Trunkline agrees to receive at the Points of Receipt and deliver at the
Points of Delivery, on a firm basis, Quantities of Natural Gas up to the
following daily Quantity (Dt), which shall constitute the Maximum Daily
Quantity:
50,000 (Dt).
---------
The Maximum Daily Quantity is stated in delivered Quantities, for which
received Quantities must be adjusted for fuel usage and lost or unaccounted for
Gas as set out in the then-effective, applicable rates and charges under
Trunkline's Rate Schedule QNT.
<PAGE>
RATE SCHEDULE QNT (Continued)
QUICK NOTICE TRANSPORTATION SERVICE
FORM OF SERVICE AGREEMENT
ARTICLE 7 - NOTICES
The Post Office addresses of both Trunkline and Shipper are as follows:
TRUNKLINE
Payment: Trunkline Gas Company
Attn: Cash Management
P. O. Box 1311
Houston, Texas 77251-1311
Nomination and
Scheduling: Trunkline Gas Company
Attn: Nominations and Allocations
P. O. Box 1642
Houston, Texas 77251-1642
BUSINESS DAY, OR SATURDAY AND
SUNDAY 8 a.m. - 12 p.m. CT
Phone: (713) 627-5638
Fax: (713) 627-5636
ALL OTHER HOURS
Attn: Gas Control Operations
Phone: (713) 627-5621
Pipeline Emergencies: Trunkline Gas Company
(Not to be used for Attn: Gas Control
any other purpose) P. O. Box 1642
Houston, Texas 77251-1642
Phone: (713) 627-5621
Toll Free: 1-800-225-3913
Texas only: 1-800-221-1084
Other: Trunkline Gas Company
Attn: Marketing Operations
P. O. Box 1642
Houston, Texas 77251-1642
Phone: (713) 627-4707
Fax: (713) 627-4752
<PAGE>
RATE SCHEDULE QNT (Continued)
QUICK NOTICE TRANSPORTATION SERVICE
FORM OF SERVICE AGREEMENT
IN WITNESS WHEREOF, both Trunkline and Shipper have caused this Agreement
to be executed in several counterparts by their respective officers or other
persons duly authorized to do so.
THE PEOPLES GAS LIGHT AND COKE COMPANY
By: /s/ Thomas M. Patrick
------------------------------
Title: Vice President
------------------------------
EXECUTED -----------------------------
TRUNKLINE GAS COMPANY
By: /s/ G. Rana
------------------------------
Title: ------------------------------
EXECUTED -----------------------------
<PAGE>
RATE SCHEDULE QNT (Continued)
FIRM TRANSPORTATION SERVICE
FORM OF SERVICE AGREEMENT
EXHIBIT A
Transportation Agreement
For
Firm Service
Under Rate Schedule QNT
Primary Points of Delivery
Seq. Meter
No. Delivered To Location County State No. MDDO
- --- ------------------ ---------- ------ ----- ----- -----
1 PEOPLES GAS (MANLO 09 21N 07E CHAMPA IL 80601 50000
Description of Facilities
Atmos.
Seq. Existing/ Operated and Pres.
No. Proposed Zone Maintained by (Psia)
- --- -------- ---- ------------- ------
1 EXISTING Z-2 TRUNKLINE GAS 14.40
Secondary Points of Delivery
Shipper shall have the secondary Points of Delivery as set forth in Section 2.3
of Trunkline's Rate Schedule QNT.
<PAGE>
RATE SCHEDULE QNT (Continued)
FIRM TRANSPORTATION SERVICE
FORM OF SERVICE AGREEMENT
EXHIBIT A
Transportation Agreement
For
Firm Service
Under Rate Schedule QNT
Primary Points of Receipt
MDRO
Seq. Meter (Net of Fuel
No. Received From Location County State No. Reimbursement)
- --- ------------- ---------- ------ ----- ----- --------------
1 EXXON (ST 165) ST 165/170 OFFSHO LA 80274 50000
Description of Facilities
Atmos.
Seq. Existing/ Operated and Pres.
No. Proposed Zone Maintained by (Psia)
- --- -------- ---- ------------- ------
1 EXISTING FLD TRUNKLINE GAS 14.70
Secondary Points of Receipt
Shipper shall have the secondary Points of Receipt as set forth in Section 2.2
of Trunkline's Rate Schedule QNT.
<PAGE>
EXHIBIT 10(i)
RATE SCHEDULE QNT
QUICK NOTICE TRANSPORTATION SERVICE
FORM OF SERVICE AGREEMENT
CONTRACT NO. T-FTS-013967
------------
THIS AGREEMENT is made effective as of the 1st day of December, 1995, by
and between:
TRUNKLINE GAS COMPANY, (hereinafter called "Trunkline"), a Delaware
Corporation,
and
THE PEOPLES GAS LIGHT AND COKE COMPANY
(hereinafter called "Shipper").
Shipper represents and warrants that Shipper conforms to the requirements of 18
C.F.R.
Section 284.102 (284B - Intrastate Pipelines or
Local Distribution Companies) ----------
Section 284.222 (284G - Interstate Pipelines) ----------
Section 284.223 (284G - Others) X
----------
In consideration of the mutual covenants and agreements as herein set forth,
both Trunkline and Shipper covenant and agree as follows:
ARTICLE 1 - SERVICE
Trunkline agrees to receive at the Points of Receipt and deliver at the
Points of Delivery, on a firm basis, Quantities of Natural Gas up to the
following daily Quantity (Dt), which shall constitute the Maximum Daily
Quantity:
150,000 (Dt).
--------------
The Maximum Daily Quantity is stated in delivered Quantities, for which
received Quantities must be adjusted for fuel usage and lost or unaccounted for
Gas as set out in the then-effective, applicable rates and charges under
Trunkline's Rate Schedule QNT.
<PAGE>
RATE SCHEDULE QNT (Continued)
QUICK NOTICE TRANSPORTATION SERVICE
FORM OF SERVICE AGREEMENT
SHIPPER
Billing: THE PEOPLES GAS LIGHT AND COKE COMPANY
122 S. MICHIGAN AVE., ROOM 915
CHICAGO , IL 60603
Attn: MR. ECKHARD BLAUMUELLER 312-431-7057
Nomination and THE PEOPLES GAS LIGHT AND COKE COMPANY
Scheduling: (1) 122 S. MICHIGAN
ROOM 915
CHICAGO , IL 60603-6156
Attn: JERRY SLECHTA 312-431-4362
All Other: THE PEOPLES GAS LIGHT AND COKE COMPANY
122 S. MICHIGAN AVE., ROOM 915
CHICAGO , IL 60603
Attn: MR. ECKHARD BLAUMUELLER 312-431-7057
(1) Please provide street address in addition to mailing address.
<PAGE>
RATE SCHEDULE QNT (Continued)
QUICK NOTICE TRANSPORTATION SERVICE
FORM OF SERVICE AGREEMENT
IN WITNESS WHEREOF, both Trunkline and Shipper have caused this Agreement
to be executed in several counterparts by their respective officers or other
persons duly authorized to do so.
THE PEOPLES GAS LIGHT AND COKE COMPANY
By: /s/ Thomas M. Patrick
--------------------------------
Title: Vice President
--------------------------------
EXECUTED ---------------------------------
TRUNKLINE GAS COMPANY
By: /s/ G. Rana
--------------------------------
Title: --------------------------------
EXECUTED --------------------------------
<PAGE>
RATE SCHEDULE QNT (Continued)
FIRM TRANSPORTATION SERVICE
FORM OF SERVICE AGREEMENT
EXHIBIT A
Transportation Agreement
For
Firm Service
Under Rate Schedule QNT
Primary Points of Delivery
Seq. Meter
No. Delivered To Location County State No. MDDO
- --- ------------------ ---------- ------ ----- ------ ------
1 MIDWESTERN GAS TRA 16 21N 13W VERMIL IL 80014 150000
Description of Facilities
Atmos.
Seq. Existing/ Operated and Pres.
No. Proposed Zone Maintained by (Psia)
- --- -------- ---- ------------- ------
1 EXISTING Z-2 TRUNKLINE GAS 14.40
Secondary Points of Delivery
Shipper shall have the secondary Points of Delivery as set forth in Section 2.3
of Trunkline's Rate Schedule QNT.
<PAGE>
RATE SCHEDULE QNT (Continued)
FIRM TRANSPORTATION SERVICE
FORM OF SERVICE AGREEMENT
EXHIBIT A
Transportation Agreement
For
Firm Service
Under Rate Schedule QNT
Primary Points of Receipt
Seq. Meter
No. Delivered To Location County State No. MDDO
- --- --------------- ---------- ------ ----- ----- ------
1 CONSUMERS POWER 11 38N 07E ELKHAR IL 80001 150000
Description of Facilities
Atmos.
Seq. Existing/ Operated and Pres.
No. Proposed Zone Maintained by (Psia)
- --- -------- ---- ------------- ------
1 EXISTING Z-2 TRUNKLINE GAS 14.40
Secondary Points of Receipt
Shipper shall have the secondary Points of Receipt as set forth in Section 2.2
of Trunkline's Rate Schedule QNT.
<PAGE>
DATE: SEPTEMBER 21, 1994 CONTRACT NO. 03200
ETS SERVICE AGREEMENT
THIS AGREEMENT is entered into by ANR PIPELINE COMPANY
(Transporter) and NORTH SHORE GAS COMPANY (SHIPPER)
WHEREAS, Shipper has requested Transporter to transport Gas on its behalf and
Transporter represents that it is willing to transport Gas under the terms and
conditions of this Agreement.
NOW, THEREFORE, Transporter and Shipper agree that the terms below, together
with the terms and conditions of Transporter's applicable Rate Schedule and
General Terms and Conditions of Transporter's FERC Gas Tariff constitute the
transportation service to be provided and the rights and obligations of Shipper
and Transporter.
1. AUTHORITY FOR TRANSPORTATION SERVICE:
284G - Blanket
2. RATE SCHEDULE: FIRM TRANSPORTATION SERVICE (ETS)
3. CONTRACT QUANTITIES:
Receipt Points - see Exhibit attached hereto.
Delivery Points - see Exhibit attached hereto.
Primary Routes - see Exhibit attached hereto.
Such Contract Quantities shall be reduced for scheduling purposes, but not
for billing purposes, by the Contract Quantities that Shipper has released
through Transporter's capacity release program for the period of any release.
4. TERM OF AGREEMENT:
04/01/1995 to
03/31/2000
DATE: SEPTEMBER 21, 1994 CONTRACT NO. 03200
<PAGE>
5. RATES:
Maximum rates, charges, and fees shall be applicable for the entitlements
and quantities delivered pursuant to this Agreement unless Transporter has
advised Shipper in writing or by ANR Xpedite that it has agreed otherwise.
It is further agreed that Transporter may seek authorization from the
Commission and/or other appropriate body at any time and from time to time to
change any rates, charges or other provisions in the applicable Rate Schedule
and General Terms and Conditions of Transporter's FERC Gas Tariff, and
Transporter shall have the right to place such changes in effect in accordance
with the Natural Gas Act. This Agreement shall be deemed to include such
changes and any changes which become effective by operation of law and
Commission order. Nothing contained herein shall be construed to deny Shipper
any rights it may have under the Natural Gas Act, including the right to
participate fully in rate or other proceedings by intervention or otherwise to
contest increased rates in whole or in part.
6. INCORPORATION BY REFERENCE
The provisions of Transporter's applicable Rate Schedule and the General
Terms and Conditions of Transporter's FERC Gas Tariff are specifically
incorporated herein by reference and made a part hereof.
7. NOTICES:
All notices can be given by telephone or other electronic means, however,
such notice shall be confirmed in writing at the addresses below or through ANR
Xpedite. Shipper or Transporter may change the addresses below by written
notice to the other without the necessity of amending this agreement:
TRANSPORTER:
ANR PIPELINE COMPANY
500 Renaissance Center
Detroit, Michigan 48243
Attentions: Gas Control (Nominations)
Volume Management (Statements)
Cash Control (Payments)
Customer Services and Business Administration
(All Other Matters)
<PAGE>
DATE: SEPTEMBER 21, 1994 CONTRACT NO. 03200
SHIPPER:
North Shore Gas Company (Shipper Name)
122 S. Michigan Ave., Suite 915 (Address)
Chicago, IL 60603 (City, State, Zip)
Attention: Mr. Eckhard Blaumueller
Telephone: (312) 431-7057
Fax: (312) 431-4558
INVOICES AND STATEMENTS:
North Shore Gas Company (Shipper Name)
122 S. Michigan Ave., Suite 915 (Address)
Chicago, IL 60603 (City, State, Zip)
Attention: Mr. Eckhard Blaumueller
Telephone: (312) 431-7057
Fax: (312) 431-4558
NOMINATIONS:
North Shore Gas Company (Shipper Name)
122 S. Michigan Ave., Suite 915 (Address)
Chicago, IL 60603 (City, State, Zip)
Attention: Mr. Jerry Slechta
Telephone: (312) 431-4362
Fax: (312) 431-4558
Mechanical Dialing
Device No (s)
--------------------
<PAGE>
DATE: SEPTEMBER 21, 1994 CONTRACT NO. 03200
ALL OTHER MATTERS:
North Shore Gas Company (Shipper Name)
122 S. Michigan Ave., Suite 915 (Address)
Chicago, IL 60603 (City, State, Zip)
Attention: Mr. Eckhard Blaumueller
Telephone: (312) 431-7057
Fax: (312) 431-4558
8. FURTHER AGREEMENT
A. For transportation under ETS Agreement (No. 03200) and storage under
FSS Agreement (No. 34150), Shipper shall pay a single rate covering both
transportation and storage services not to exceed $1.25 times 6.25 BCF. This
rate is inclusive of Volumetric Buyout/Buydown, Dakota and Transition Costs. In
addition, Shipper will be charged ACA, applicable GRI, fuel and any other
related fees or surcharges.
B. For billing purposes, Transporter has discretion in determining the
portion of the rate to be assigned to transportation and/or storage as well as
the portion of the rate to be assigned to Reservation and/or Commodity.
C. From time to time dependent upon Transporter's use percents, the MDQ's
and MSQ under ETS Agreement (No. 03200) and FSS Agreement (No. 34150) will be
adjusted to allow Shipper to deliver and store sufficient fuel quantities to
effectuate a 50 day storage withdrawal quantity of 125,000 dth at the specified
delivery points at no additional charge.
<PAGE>
DATE: SEPTEMBER 21, 1994 CONTRACT NO. 03200
D. Shipper can use the unused portion of its Primary Route MDQ on a Secondary
basis at the following receipt points at no additional charge:
1. Joliet (NGPL)
2. Defiance (PEPL)
3. Joliet (Midwestern)
4. Shorewood (NIGAS) - (by displacement)
5. Kalkaska or Chester (Mich Con)
6. East Joliet (PGL&C) - (by displacement)
7. Elkhart (Trunkline)
8. Crystal Falls (GLGT)
E. Shipper and Transporter agree that the rates stated herein shall be
confidential and shall be maintained confidentially by Shipper and Transporter.
Shipper or Transporter may disclose such rates only if such disclosure is
required by law and Shipper or Transporter requests confidential or privileged
treatment under applicable statutes, rules and regulations, and provides
reasonable notice to the other party prior to such disclosure. Any unauthorized
disclosure by Shipper of the rates stated herein shall have the effect of
terminating from the date the discounted rate is disclosed any rate discounts
reflected herein such that, for the remaining term of this Agreement, Shipper
shall be required to pay Transporter the maximum applicable rate for service, as
well as all other charges, surcharges or direct bill applicable to such service.
F. Except as provided above, all quantities associated with Secondary Receipt
Points, Secondary Delivery Points and Secondary Routes under this Agreement will
be at Maximum Tariff Rates plus all other related fees, surcharges and fuel.
G. This Agreement may be assigned to an affiliate of Shipper subject to the
satisfaction of Transporter's credit requirements.
H. In addition, upon ninety (90) days prior notice, before each contract year
commences, Shipper may renominate the Maximum Storage Quantity and the Maximum
Withdrawal Transport volume subject to the availablity of capacity on
Transporter's Pipeline and a mutually acceptable rate, provided that the
revenues from the renominated service are equal to or greater than the revenues
that Transporter would have otherwise received if the service had not changed
from the previous contract year.
<PAGE>
DATE: SEPTEMBER 21, 1994 CONTRACT NO. 03200
I. Shipper agrees to waive its rights to release the capacity underlying this
Agreement.
J. Consistent with provisions of its Tariff, Transporter is willing to
contract on Shipper's behalf for capacity required on third party transporters,
or for other services to effectuate Shipper's receipt of gas on third party
facilities and delivery of gas to Transporter's facilities.
Shipper must advise Transporter prior to commencement of such third party
transportation of its desire to have Transporter act in such a capacity. Unless
and until notified otherwise, however, if Shipper submits a nomination to
Transporter for the transportation of gas from HIOS points of receipt, Shipper
understands and agrees that such nomination shall constitute Shipper's request
for Transporter to act in such capacity.
Shipper agrees to pay all charges related to such third party
transportation arrangements pursuant to Transporter's Tariff.
K. To the extent Shipper desires to utilize receipt/delivery points pursuant
to Part 284 B (Section 311 of the NGPA and Section 284.102 of the Commission's
regulations), Shipper must execute a separate agreement with Transporter and
Shipper must also certify that the transportation of gas will be on behalf of
either an "intrastate pipeline" or a "local distribution company."
L. The complete agreement between Transporter and Shipper shall consist of
this ETS Agreement (No. 03200) and the following agreements between Transporter
and Shipper: FSS Agreement (No. 34150); September 28, 1994 Letter of Intent;
and September 28, 1994 Operating Agreement.
9. OPERATIONAL FLOW ORDERS
Shipper hereby guarantees to Transporter that each contract it has entered
into in connection with the Gas to be transported under this Agreement contains
a provision that permits Transporter to issue an effective Operational Flow
Order pursuant to Section 8 of the General Terms and Conditions. Shipper shall
also guarantee for any supply contract for Gas that is transported via Viking
Gas Transmission Company, that Transporter shall be designated a third party
beneficiary.
<PAGE>
DATE: SEPTEMBER 21, 1994 CONTRACT NO. 03200
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
by their respective Officers or Representatives thereunto duly authorized to be
effective as of the date stated above.
NORTH SHORE
SHIPPER: GAS COMPANY TRANSPORTER: ANR PIPELINE COMPANY
By: /s/ Thomas M. Patrick By: /s/ Wilbur Hitchcock
---------------------- ----------------------
Title: Vice President Title: Sr. Vice President
-------------- ------------------
Date: October 10, 1994 Date: October 6, 1994
---------------- ---------------
03200.ets
<PAGE>
<TABLE>
<CAPTION>
PRIMARY RECEIPT POINT EXHIBIT Contract No. 03200
To Agreement Between Rate Schedule ETS
ANR Pipeline Company (Transporter) Contract Date: September 21, 1994
and North Shore Gas Company Shipper) Amendment Date:
Primary
Receipt Primary
Point Receipt Point MDQ
Number Name (Dth) Period
- ------ ---- ----- ------
<S> <C> <C> <C>
SOUTH WOODSTOCK or 36,661 SUMMER
WEST JOLIET (by displacement)
ANR STORAGE FACILITIES 125,000 WINTER
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRIMARY DELIVERY POINT EXHIBIT Contract No. 03200
To Agreement Between Rate Schedule ETS
ANR Pipeline Company (Transporter) Contract Date: September 21, 1994
and North Shore Gas Company (Shipper) Amendment Date:
Primary
Delivery Primary
Point Delivery Point MDQ
Number Name (Dth) Period
- ------ ---- ----- ------
<S> <C> <C> <C> <C>
ANR STORAGE FACILITIES 36,661 SUMMER
Group #1 125,000 WINTER
EAST JOLIET
BUSSE ROAD
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRIMARY ROUTE EXHIBIT Contract No. 03200
To Agreement Between Rate Schedule ETS
ANR Pipeline Company (Transporter) Contract Date: September 21, 1994
and North Shore Gas Company (Shipper) Amendment Date:
<S> <C> <C> <C>
Primary
Receipt/
Delivery Primary
Point Receipt Point MDQ
Number Name (Dth) Period
------ ---- ----- ------
SOUTH WOODSTOCK or 36,661 SUMMER
WEST JOLIET (by displacement)-
ANR STORAGE FACILITES
ANR STORAGE FACILITIES- 125,000 WINTER
GROUP #1
</TABLE>
<PAGE>
DATE: SEPTEMBER 21, 1994 CONTRACT NO. 34150
FSS SERVICE AGREEMENT
THIS AGREEMENT is entered into by ANR PIPELINE COMPANY
(Transporter) and NORTH SHORE GAS COMPANY (Shipper).
WHEREAS, Shipper has requested Transporter to transport Gas on its behalf and
Transporter represents that it is willing to transport Gas under the terms and
conditions of this Agreement.
NOW, THEREFORE, Transporter and Shipper agree that the terms below, together
with the terms and conditions of Transporter's applicable Rate Schedule and
General Terms and Conditions of Transporter's FERC Gas Tariff constitute the
transportation service to be provided and the rights and obligation of Shipper
and Transporter.
1. AUTHORITY FOR TRANSPORTATION SERVICE:
284G - Blanket
2. RATE SCHEDULE: FIRM STORAGE SERVICE (FSS)
3. CONTRACT QUANTITIES:
Contract Quantity - see Exhibit attached hereto.
Such Contract Quantities shall be reduced for scheduling purposes, but not
for billing purposes, by the Contract Quantities that Shipper has released
through Transporter's capacity release program for the period of any
release.
4. TERM OF AGREEMENT:
04/01/1995 to
03/31/2000
<PAGE>
DATE: SEPTEMBER 21, 1994 CONTRACT NO. 34150
5. RATES:
Maximum rates, charges, and fees shall be applicable for the entitlements
and quantities delivered pursuant to this Agreement unless Transporter has
advised Shipper in writing or by ANR Xpedite that it has agreed otherwise.
It is further agreed that Transporter may seek authorization from the
Commission and/or other appropriate body at any time and from time to time
to change any rates, charges or other provisions in the applicable Rate
Schedule and General Terms and Conditions of Transporter's FERC Gas Tariff,
and Transporter shall have the right to place such changes in effect in
accordance with the Natural Gas Act. This Agreement shall be deemed to
include such changes and any changes which become effective by operation of
law and Commission order. Nothing contained herein shall be construed to
deny Shipper any rights it may have under the Natural Gas Act, including
the right to participate fully in rate or other proceedings by intervention
or otherwise to contest increased rates in whole or in part.
6. INCORPORATION BY REFERENCE
The provisions of Transporter's applicable Rate Schedule and the General
Terms and Conditions of Transporter's FERC Gas Tariff are specifically
incorporated herein by reference and made a part hereof.
7. NOTICES:
All notices can be given by telephone or other electronic means, however,
such notice shall be confirmed in writing at the addresses below or through
ANR Xpedite. Shipper and Transporter may change the addresses below by
written notice to the other without the necessity of amending this
agreement:
TRANSPORTER:
ANR PIPELINE COMPANY
500 Renaissance Center
Detroit, Michigan 48243
Attentions: Gas Control (Nominations)
Volume Management (Statements)
Cash Control (Payments)
Customer Services and Business Administration
(All Other Matters)
<PAGE>
DATE: SEPTEMBER 21, 1994 CONTRACT NO. 34150
SHIPPER:
North Shore Gas Company (Shipper Name)
122 S. Michigan Ave., Suite 915 (Address)
Chicago, IL 60603 (City, State, Zip)
Attention: Mr. Eckhard Blaumueller
Telephone: (312) 431-7057
Fax: (312) 431-4558
INVOICES AND STATEMENTS:
North Shore Gas Company (Shipper Name)
122 S. Michigan Ave., Suite 915 (Address)
Chicago, IL 60603 (City, State, Zip)
Attention: Mr. Eckhard Blaumueller
Telephone: (312) 431-7057
Fax: (312) 431-4558
NOMINATIONS:
North Shore Gas Company (Shipper Name)
122 S. Michigan Ave., Suite 915 (Address)
Chicago, IL 60603 (City, State, Zip)
Attention: Mr. Jerry Slechta
Telephone: (312) 431-4362
Fax: (312) 431-4558
Mechanical Dialing
Device Nos:
----------------------
<PAGE>
DATE: SEPTEMBER 21, 1994 CONTRACT NO. 34150
ALL OTHER MATTERS:
North Shore Gas Company (Shipper Name)
122 S. Michigan Ave., Suite 915 (Address)
Chicago, IL 60603 (City, State, Zip)
Attention: Mr. Eckhard Blaumueller
Telephone: (312) 431-7057
Fax: (312) 431-4558
8. FURTHER AGREEMENT
A. For transportation under ETS Agreement (No. 03200) and storage under
FSS Agreement (No. 34150), Shipper shall pay a single rate covering
both transportation and storage services not to exceed $1.25 times
6.25 BCF. This rate is inclusive of Volumetric Buyout/Buydown,
Dakota and Transition Costs. In addition, Shipper will be charged
ACA, applicable GRI, fuel and any other related fees or surcharges.
B. For billing purposes, Transporter has discretion in determining the
portion of the rate to be assigned to transportation and/or storage
as well as the portion of the rate to be assigned to Reservation
and/or Commodity.
C. From time to time dependent upon Transporter's use percents, the MDQ's
and MSQ under ETS Agreement (No. 03200) and FSS Agreement (No. 34150)
will be adjusted to allow Shipper to deliver and store sufficient fuel
quantities to effectuate a 50 day storage withdrawal quantity of
125,000 dth at the specified delivery points at no additional charge.
<PAGE>
DATE: SEPTEMBER 21, 1994 CONTRACT NO. 34150
D. Shipper can use the unused portion of its Primary Route MDQ on a
Secondary basis at the following receipt points at no additional
charge:
1. Joliet (NGPL)
2. Defiance (PEPL)
3. Joliet (Midwestern)
4. Shorewood (NIGAS) - (by displacement)
5. Kalkaska or Chester (Mich Con)
6. East Joliet (PGL&C) - (by displacement)
7. Elkhart (Trunkline)
8. Crystal Falls (GLGT)
E. Shipper and Transporter agree that the rates stated herein shall be
confidential and shall be maintained confidentially by Shipper and
Transporter. Shipper or Transporter may disclose such rates only if
such disclosure is required by law and Shipper or Transporter requests
confidential or privileged treatment under applicable statutes, rules
and regulations, and provides reasonable notice to the other party
prior to such disclosure. Any unauthorized disclosure by Shipper of
the rates stated herein shall have the effect of terminating from the
date the discounted rate is disclosed any rate discounts reflected
herein such that, for the remaining term of this Agreement, Shipper
shall be required to pay Transporter the maximum applicable rate for
service, as well as all other charges, surcharges or direct bill
applicable to such service.
F. This Agreement may be assigned to an affiliate of Shipper subject to
the satisfaction of Transporter's credit requirements.
G. In addition, upon ninety (90) days prior notice, before each contract
year commences, Shipper may renominated the Maximum Storage Quantity
and the Maximum Withdrawal Transport volume subject to the
availability of capacity on Transporter's Pipeline and a mutually
acceptable rate, provided that the revenues from the renominated
service are equal to or greater than the revenues that Transporter
would have otherwise received if the service had not changed from
the previous contract year.
H. Shipper agrees to waive its rights to release the capacity underlying
this Agreement.
I. Shipper agrees to waive its rights to in-field storage transfers.
<PAGE>
DATE: SEPTEMBER 21, 1994 CONTRACT NO. 34150
J. The complete agreement between Transporter and Shipper shall consist
of this FSS Agreement (No. 34150) and the following agreements
between Transporter and Shipper: ETS Agreement (No. 03200);
September 28, 1994 Letter of Intent; and September 28, 1994
Operating Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
by their respective Officers or Representatives thereunto duly authorized to be
effective as of the date stated above.
NORTH SHORE
SHIPPER: GAS COMPANY TRANSPORTER: ANR PIPELINE COMPANY
By: /s/Thomas M. Patrick By: /s/Wilbur Hitchcock
---------------------- -----------------------
Title: Vice President Title: Sr. Vice President
--------------- ------------------
Date: October 10, 1994 Date: October 6, 1994
---------------- ---------------
34150.fss
<PAGE>
Contract No. 110522
NATURAL GAS PIPELINE COMPANY OF AMERICA (Natural)
TRANSPORTATION RATE SCHEDULE FTS AGREEMENT DATED September 22, 1995
UNDER SUBPART G of Part 284 OF THE FERC'S REGULATIONS
1. SHIPPER is: NORTH SHORE GAS COMPANY, a LOCAL DISTRIBUTION COMPANY
2. (a) MDQ totals: 20,000 MMBTU per day.
(b) Service option selected (check any or all):
[ ] LN [ ] SW [ ] NB
3. TERM: December 01, 1995 through November 30, 1998
4. Service will be ON BEHALF OF: [X] Shipper or [ ] Other.
5. The ULTIMATE END USERS are customers within any state in the continental
U.S.; or (specify state)
-----------------------------------------------------------
6. [ ] This Agreement supersedes and cancels a ________ Agreement dated _____
[ ] Capacity rights for this Agreement were released from Natural's
Transportation Rate Schedule Agreement (KT #) dated and are subject to any
recall/return provisions in Natural's Capacity Release Package ID #.
[x] [for firm service only] Service and reservation charges commence the
latter of:
(a) December 01, 1995, and
(b) the date capacity to provide the service hereunder is available on
Natural's System.
[ ] Other:
--------------------------------------------
7. SHIPPER'S ADDRESSES NATURAL'S ADDRESSES
GENERAL CORRESPONDENCE:
NORTH SHORE GAS COMPANY Natural Gas Pipeline Company of America
WILLIAM MORROW Attention: Gas Transportation Services
130 E. RANDOLPH DR. 3200 Southwest Freeway 77027-7253
CHICAGO, IL 60601-6207 P.O. Box 283 77001-0283
Houston, Texas
STATEMENTS/INVOICES/ACCOUNTING RELATED MATERIALS:
NORTH SHORE GAS COMPANY Natural Gas Pipeline Company of America
ANTHONY COMPTON Attention: Gas Accounting Department
130 E. RANDOLPH DR. 701 East 22nd Street
CHICAGO IL, 60601-6207 Lombard, Illinois 60148
PAYMENTS:
Natural Gas Pipeline Company of America
Attention: Controller
701 East 22nd Street
Lombard, Illinois 60148
<PAGE>
8. The above stated Rate Schedule, as revised from time to time, controls this
Agreement and is incorporated herein. The attached Exhibits A, B, and C (for
firm service only) are a part of this Agreement. Natural AND SHIPPER
ACKNOWLEDGE THAT THIS AGREEMENT IS SUBJECT TO THE PROVISIONS OF Natural's FERC
GAS TARIFF AND APPLICABLE FEDERAL LAW. TO THE EXTENT THAT STATE LAW IS
APPLICABLE, Natural AND SHIPPER EXPRESSLY AGREE THAT THE LAWS OF THE STATE OF
ILLINOIS SHALL GOVERN THE VALIDITY, CONSTRUCTION, INTERPRETATION AND EFFECT OF
THIS CONTRACT, EXCLUDING, HOWEVER, ANY CONFLICT OF LAWS RULE WHICH WOULD APPLY
THE LAW OF ANOTHER STATE. This Agreement states the entire agreement between
the parties and no waiver, representation, or agreement shall affect this
Agreement unless it is in writing. Shipper shall provide the actual end user
purchaser name(s) to Natural if Natural must provide them to FERC.
AGREED TO BY:
NATURAL GAS PIPELINE COMPANY OF AMERICA NORTH SHORE GAS COMPANY
"Natural" "Shipper"
By: /s/ Stephen G. Weinan By: /s/ T. M. Patrick
------------------------------ --------------------
Name: Stephen G. Weinan Name: Thomas M. Patrick
----------------------------- -------------------
Title: Attorney in fact Title: Vice President
----------------------------- -------------------
110522
<PAGE>
EXHIBIT A
DATED: September 22, 1995
EFFECTIVE DATE: December 01, 1995
COMPANY: NORTH SHORE GAS COMPANY
CONTRACT: 110522
RECEIPT POINT/S
County/Parish PIN MDQ
Name/Location Area State No. Zone (MMBtu/d)
- ------------- ------------- ----- --- ---- ---------
PRIMARY RECEIPT POINT/S
1.NNG/NGPL MILLS MILLS IA 203 07 8929
INTERCONNECT WITH
NORTHERN NATURAL GAS
COMPANY IN SEC.
26-T72N-R43W
MILLS COUNTY, IOWA.
2.N BORDER/NGPL HARPER KEOKUK IA 8090 09 11071
KEOKUK INTERCONNECT WITH
NORTHERN BORDERPIPELINE
COMPANY ON TRANSPORTER'S
AMARILLO MAINLINE IN SEC.
30-T76N-R10W,
KEOKUK COUNTY, IOWA.
SECONDARY RECEIPT POINT/S
All secondary receipt point, and the related priorities and volumes, as
provided under the Tariff provisions governing this Agreement.
RECEIPT PRESSURE, ASSUMED ATMOSPHERIC PRESSURE
Natural gas to be delivered to Natural at the Receipt Point/s shall be at a
delivery pressure sufficient to enter Natural's pipeline facilities at the
pressure maintained from time to time, but Shipper shall not deliver gas at a
pressure in excess of the Maximum Allowable Operating Pressure (MAOP) stated for
each Receipt Point. The measuring party shall use or cause to be used an
assumed atmospheric pressure corresponding to the elevation at such Receipt
Point/s.
RATES
Except as provided to the contrary in any written agreement(s) between the
parties in effect during the term hereof, Shipper shall pay Natural the maximum
rate and all other lawful charges as specified in Natural's applicable rate
schedule.
<PAGE>
EXHIBIT A (CONT'D)
DATED September 22, 1995
EFFECTIVE DATE: December 01, 1995
COMPANY: NORTH SHORE GAS COMPANY
CONTRACT: 110522
FUEL GAS AND GAS LOST AND UNACCOUNTED FOR PERCENTAGE (%)
Shipper will be assessed the applicable percentage for Fuel Gas and Gas
Lost and Unaccounted For.
TRANSPORTATION OF LIQUIDS
Transportation of liquids may occur at permitted points identified in
Natural's current Catalog of Receipt and Delivery Points, but only if the
parties execute a separate liquids agreement.
<PAGE>
EXHIBIT B
DATED September 22, 1995
EFFECTIVE DATE: December 01, 1995
COMPANY: NORTH SHORE GAS COMPANY
CONTRACT: 110522
DELIVERY POINT/S
County/Parish PIN MDQ
Name/Location Area State No. Zone (MMBtu/d)
- ------------- ------------- ----- --- ---- ---------
PRIMARY DELIVERY POINT/S
1.NO SHORE/NGPL LAKE IL 1 06 20000
GRAYSLAKE LAKE
INTERCONNECT WITH NORTH
SHORE GAS COMPANY
LOCATED IN SEC.
12-T44N-R10E,
LAKE COUNTY, ILLINOIS.
SECONDARY DELIVERY POINT/S
All secondary delivery points, and the related priorities and volumes, as
provided under the Tariff provisions governing this Agreement.
DELIVERY PRESSURE, ASSUMED ATMOSPHERIC PRESSURE
Natural gas to be delivered by Natural to Shipper, or for Shipper's
account, at the Delivery Point/s shall be at the pressure available in Natural's
pipeline facilities from time to time. The measuring party shall use or cause
to be used an assumed atmospheric pressure corresponding to the elevation at
such Delivery Point/s.
<PAGE>
EXHIBIT C
DATED September 22, 1995
EFFECTIVE DATE: December 01, 1995
COMPANY: NORTH SHORE GAS COMPANY
CONTRACT: 110522
Pursuant to Natural's tariff, an MDQ exists for each primary transportation
path segment and direction under the Agreement. Such MDQ is the maximum daily
quantity of gas which Natural is obligated to transport on a firm basis along a
primary transportation path segment.
A primary transportation path segment is the path between a primary
receipt, delivery, or node point and the next primary receipt, delivery, or node
point. A node point is the point of interconnection between two or more of
Natural's pipeline facilities.
A segment is a section Natural's pipeline system designated by a segment
number whereby the Shipper under the terms of their agreement based on the
points within the segment identified on Exhibit C has throughput capacity
rights.
The segment numbers listed on Exhibit C reflect this Agreement's path
corresponding to Natural's most recent Pipeline System Map which identifies
segments and their corresponding numbers. All information provided in this
Exhibit C is subject to the actual terms and conditions of Natural's Tariff.
<PAGE>
EXHIBIT C
DATED September 22, 1995
EFFECTIVE DATE: December 01, 1995
COMPANY: NORTH SHORE GAS COMPANY
CONTRACT: 110522
Segment Upstream Forward/Backward Flow Through
Number Segment Haul (Contractual) Capacity
- ------ ------- ------------------ --------
13 0 F 0
14 13 F 8929
29 14 F 20000
37 29 F 20000
39 37 F 20000
<PAGE>
Contract No. 110656
NATURAL GAS PIPELINE COMPANY OF AMERICA (NATURAL)
STORAGE RATE SCHEDULE NSS
AGREEMENT
DATED October 19, 1995
1. SHIPPER is: NORTH SHORE GAS COMPANY, a LOCAL DISTRIBUTION COMPANY
2. (a) MDQ totals: 28,571 MMBtu per day.
(b) MSV totals: 2,142,825 MMBtu.
3. TERM: December 01, 1995 through March 31, 1998
4. [ ] This Agreement supersedes and cancels a _____ Agreement dated _____
[ ] Capacity rights for this Agreement were released from Natural's
Transportation Rate Schedule Agreement (KT #) dated and are subject to any
recall/return provisions in Natural's Capacity Release Package ID #.
[ ] Service and reservation charges commence the latter of:
(a) December 01, 1995, and
(b) the date capacity to provide the service hereunder is
available on Natural's System.
[X] Other: This is a partial conversion from Shipper's S-1 Agreement No.
250005, dated November 30, 1990 and LS-2 Agreement No. 250014, dated March
14, 1990.
5. SHIPPER'S ADDRESSES NATURAL'S ADDRESSES
GENERAL CORRESPONDENCE:
NORTH SHORE GAS COMPANY NATURAL GAS PIPELINE CO. OF AMERICA
WILLIAM MORROW Attention: Gas Transportation
Services
130 E. RANDOLPH DR. 3200 Southwest Freeway 77027-7523
CHICAGO, IL 60601-6207 P.O. Box 283 77001-0283
Houston, Texas
STATEMENTS/INVOICES/ACCOUNTING RELATED MATERIALS:
NORTH SHORE GAS COMPANY NATURAL GAS PIPELINE CO. OF AMERICA
ANTHONY COMPTON Attention: Gas Accounting Department
130 E. RANDOLPH DR. 701 East 22nd Street
CHICAGO, IL 60601-6207 Lombard, Illinois 60148
PAYMENTS:
NATURAL GAS PIPELINE OF AMERICA
Attention: Controller
701 East 22nd Street
Lombard, Illinois 60148
<PAGE>
6. The above-stated Rate Schedule, as revised from time to time, controls this
Agreement and is incorporated herein. NATURAL GAS PIPELINE COMPANY OF AMERICA
AND SHIPPER ACKNOWLEDGE THAT THIS AGREEMENT IS SUBJECT TO THE PROVISIONS OF
Natural's FERC GAS TARIFF AND APPLICABLE FEDERAL LAW. TO THE EXTENT THAT STATE
LAW IS APPLICABLE, Natural AND SHIPPER EXPRESSLY AGREE THAT THE LAWS OF THE
STATE OF ILLINOIS SHALL GOVERN THE VALIDITY, CONSTRUCITON, INTERPRETATION AND
EFFECT OF THIS CONTRACT, EXCLUDING, HOWEVER, ANY CONFLICT OF LAWS RULE WHICH
WOULD APPLY THE LAW OF ANOTHER STATE. This Agreement states the entire
agreement between the parties and no waiver, representation, or agreement shall
affect this Agreement unless it is in writing.
AGREED TO BY:
NATURAL GAS PIPELINE COMPANY OF AMERICA NORTH SHORE GAS COMPANY
"Natural" "Shipper"
By: /s/ Stephen G. Weinan By: /s/ T. M. Patrick
-------------------------- -----------------------
Name: Stephen G. Weinan Name: Thomas M. Patrick
------------------------ -----------------
Title: Attorney in fact Title: Vice President
----------------------- ----------------
<PAGE>
Contract No. 110657
NATURAL GAS PIPELINE COMPANY OF AMERICA (Natural)
TRANSPORTATION RATE SCHEDULE FTS AGREEMENT DATED October 19, 1995
UNDER SUBPART G of Part 284 OF THE FERC'S REGULATIONS
1. SHIPPER is: NORTH SHORE GAS COMPANY, a LOCAL DISTRIBUTION COMPANY
2. (a) MDQ totals: 20,000 MMBTU per day.
(b) Service option selected (check any or all):
[X} LN [ ] SW [X} NB
3. TERM: December 01, 1995 through March 31, 1998
4. Service will be ON BEHALF OF: [X] Shipper or [] Other:.
5. The ULTIMATE END USERS are customers within any state in the continental
U.S.; or (specify state)
- --------------------------------------------------------------------------------
6. [ ] This Agreement supersedes and cancels a ______ Agreement dated ______
[ ] Capacity rights for this Agreement were released from Natural's
Transportation Rate Schedule Agreement (KT #) dated and are subject to any
recall/return provisions in Natural's Capacity Release Package ID #.
[X] [for firm service only] Service and reservation charges commence the
latter of:
(a) December 01, 1995, and
(b) the date capacity to provide the service hereunder is available on
Natural's System.
[ ] Other:
-----------------------------------------------------------
7. SHIPPER'S ADDRESSES NATURAL'S ADDRESSES
GENERAL CORRESPONDENCE:
NORTH SHORE GAS COMPANY Natural Gas Pipeline Company of America
WILLIAM MORROW Attention: Gas Transportation Services
130 E. RANDOLPH DR. 3200 Southwest Freeway 77027-7523
CHICAGO, IL 60601 P.O. Box 283 77001-0283
Houston, Texas
STATEMENTS/INVOICES/ACCOUNTING RELATED MATERIALS:
NORTH SHORE GAS COMPANY Natural Gas Pipeline Company of America
ANTHONY COMPTON Attention: Gas Accounting Department
130 E. RANDOLPH DR. 701 East 22nd Street
CHICAGO, IL 60601 Lombard, Illinois 60148
PAYMENTS:
Natural Gas Pipeline Company of America
Attention: Controller
701 East 22nd Street
Lombard, Illinois 60148
<PAGE>
8. The above stated Rate Schedule, as revised from time to time, controls this
Agreement and is incorporated herein. The attached Exhibits A, B, and C
(for firm service only) are a part of this Agreement. Natural AND SHIPPER
ACKNOWLEDGE THAT THIS AGREEMENT IS SUBJECT TO THE PROVISIONS OF Natural's
FERC GAS TARIFF AND APPLICABLE FEDERAL LAW. TO THE EXTENT THAT STATE LAW
IS APPLICABLE, Natural AND SHIPPER EXPRESSLY AGREE THAT THE LAWS OF THE
STATE OF ILLINOIS SHALL GOVERN THE VALIDITY, CONSTRUCTION, INTERPRETATION
AND EFFECT OF THIS CONTRACT, EXCLUDING, HOWEVER, ANY CONFLICT OF LAWS RULE
WHICH WOULD APPLY THE LAW OF ANOTHER STATE. This Agreement states the
entire agreement between the parties and no waiver, representation, or
agreement shall affect this Agreement unless it is in writing. Shipper
shall provide the actual end user purchaser name(s) to Natural if Natural
must provide them to FERC.
AGREED TO BY:
NATURAL GAS PIPELINE COMPANY OF AMERICA NORTH SHORE GAS COMPANY
"Natural" "Shipper"
By: /s/ Stephen G. Weinan By: /s/ T. M. Patrick
----------------------- ------------------------
Name: Stephen G. Weinan Name: Thomas M. Patrick
--------------------- -----------------------
Title: Attorney in fact Title: Vice President
--------------------- -----------------------
<PAGE>
EXHIBIT A
DATED: October 19, 1995
EFFECTIVE DATE: December 01, 1995
COMPANY: NORTH SHORE GAS COMPANY
CONTRACT: 110657
RECEIPT POINT/S
County/Parish PIN MDQ
NAME/LOCATION Area STATE NO. ZONE (MMBTU)
- ------------- ------------- ----- --- ---- -------
PRIMARY RECEIPT POINT/S
1. NGCENRGY/NGPL MAUD MILLER AR 3844 08 20000
INTERCONNECT WITH NGC-ENERGY
ON TRANSPORTER'S MAUD
LATERAL IN SEC. 33-T17S-R28W,
MILLER COUNTY, ARKANSAS
SECONDARY RECEIPT POINT/S
All secondary receipt points, and the related priorities and volumes, as
provided under the Tariff provisions governing this Agreement.
RECEIPT PRESSURE, ASSUMED ATMOSPHERIC PRESSURE
Natural gas to be delivered to Natural at the Receipt Point/s shall be at a
delivery pressure sufficient to enter Natural's pipeline facilities at the
pressure maintained from time to time, but Shipper shall not deliver gas at a
pressure in excess of the Maximum Allowable Operating Pressure (MAOP) stated for
each Receipt Point. The measuring party shall use or cause to be used an
assumed atmospheric pressure corresponding to the elevation at such Receipt
Point/s.
RATES
Except as provided to the contrary in any written agreement(s) between the
parties in effect during the term hereof, Shipper shall pay Natural the maximum
rate and all other lawful charges as specified in Natural's applicable rate
schedule.
FUEL GAS AND GAS LOST AND UNACCOUNTED FOR PERCENTAGE (%)
Shipper will be assessed the applicable percentage for Fuel Gas and Gas
Lost and Unaccounted For.
A-1
<PAGE>
EXHIBIT A (CONT'D)
DATED OCTOBER 19, 1995
EFFECTIVE DATE: December 01, 1995
COMPANY: NORTH SHORE GAS COMPANY
CONTRACT: 110657
TRANSPORTATION OF LIQUIDS
Transportation of liquids may occur at permitted points identified in
Natural's current Catalog of Receipt and Delivery Points, but only if the
parties execute a separate liquids agreement.
A-2
<PAGE>
EXHIBIT B
DATED October 19, 1995
EFFECTIVE DATE: December 01, 1995
COMPANY: NORTH SHORE GAS COMPANY
CONTRACT: 110657
DELIVERY POINT/S
County/Parish PIN MDQ
Name/Location Area State No. Zone (MMBTU)
- ------------- ------------- ----- --- ---- -------
PRIMARY DELIVERY POINT/S
1. NO SHORE/NGPL LAKE IL 1 06 20000
GRAYSLAKE LAKE
INTERCONNECT WITH NORTH
SHORE GAS COMPANY
LOCATED IN SEC.
12-T44N-R10E,
LAKE COUNTY, ILLINOIS.
SECONDARY DELIVERY POINT/S
All secondary delivery points, and the related priorities and volumes, as
provided under the Tariff provisions governing this Agreement.
DELIVERY PRESSURE, ASSUMED ATMOSPHERIC PRESSURE
Natural gas to be delivered by Natural to Shipper, or for Shipper's
account, at the Delivery Point/s shall be at the pressure available in Natural's
pipeline facilities from time to time. The measuring party shall use or cause
to be used an assumed atmospheric pressure corresponding to the elevation at
such Delivery Point/s.
B-1
<PAGE>
EXHIBIT C
DATED October 19, 1995
EFFECTIVE DATE: December 01, 1995
COMPANY: NORTH SHORE GAS COMPANY
CONTRACT: 110657
Pursuant to Natural's tariff, an MDQ exists for each primary transportation
path segment and direction under the Agreement. Such MDQ is the maximum daily
quantity of gas which Natural is obligated to transport on a firm basis along a
primary transportation path segment.
A primary transportation path segment is the path between a primary
receipt, delivery, or node point and the next primary receipt, delivery, or node
point. A node point is the point of interconnection between two or more of
Natural's pipeline facilities.
A segment is a section of Natural's pipeline system designated by a segment
number whereby the Shipper under the terms of their agreement based on the
points within the segment identified on Exhibit C has throughput capacity
rights.
The segment numbers listed on Exhibit C reflect this Agreement's path
corresponding to Natural's most recent Pipeline System Map which identifies
segments and their corresponding numbers. All information provided in this
Exhibit C is subject to the actual terms and conditions of Natural's Tariff.
C-1
<PAGE>
EXHIBIT C
DATED October 19, 1995
EFFECTIVE DATE: December 01, 1995
COMPANY: NORTH SHORE GAS COMPANY
CONTRACT: 110657
Segment Upstream Forward/Backward Flow Through
Number Segment Haul (Contractual) Capacity
- ------ ------- ------------------ ------------
27 0 F 0
28 27 F 20000
39 40 F 20000
40 28 F 20000
C-2
<PAGE>
Contract No. 110386
NATURAL GAS PIPELINE COMPANY OF AMERICA (NATURAL)
STORAGE RATE SCHEDULE DSS
AGREEMENT DATED December 01, 1995
1. SHIPPER is: NORTH SHORE GAS COMPANY, a LOCAL DISTRIBUTION COMPANY
2. (a) MDQ totals: 20,000 MMBtu per day.
(b) MSV totals: 1,000,000 MMBtu.
(c) The primary Delivery Point(s) and associated MDQ(s) are contained in
Exhibit B attached hereto and are a part of this Agreement.
3. TERM: December 01, 1995 through March 31, 1998
4. [X] This Agreement supersedes and cancels a S-1 Agreement No. 250005 dated
November 30, 1990 and a LS-2 Agreement No. 250014 dated March 14, 1990.
[ ] Capacity rights for this Agreement were released from Natural's
Transportation Rate Schedule Agreement (KT #) dated and are subject to any
recall/return provisions in Natural's Capacity Release Package ID #.
[ ] Service and reservation charges commence the latter of:
(a) December 01, 1995, and
(b) the date capacity to provide the service hereunder is
available on Natural's System.
[ ] Other:
--------------------------------------------------------------
5. SHIPPER'S ADDRESSES NATURAL'S ADDRESSES
GENERAL CORRESPONDENCE:
NORTH SHORE GAS COMPANY NATURAL GAS PIPELINE CO. OF AMERICA
WILLIAM MORROW Attention: Gas Transportation Services
130 E. RANDOLPH DR. 3200 Southwest Freeway 77027-7523
CHICAGO, IL 60601 P.O. Box 283 77001-0283
Houston, Texas
STATEMENTS/INVOICES/ACCOUNTING RELATED MATERIALS:
NORTH SHORE GAS COMPANY NATURAL GAS PIPELINE CO. OF AMERICA
ANTHONY COMPTON Attention: Gas Accounting Department
130 E. RANDOLPH DR. 701 East 22nd Street
CHICAGO, IL 60601 Lombard, Illinois 60148
Payments:
NATURAL GAS PIPELINE CO. OF AMERICA
Attention: Controller
701 East 22nd Street
Lombard, Illinois 60148
<PAGE>
6. The above-stated Rate Schedule, as revised from time to time, controls this
Agreement and is incorporated herein. NATURAL GAS PIPELINE COMPANY OF
AMERICA AND SHIPPER ACKNOWLEDGE THAT THIS AGREEMENT IS SUBJECT TO THE
PROVISIONS OF Natural's FERC GAS TARIFF AND APPLICABLE FEDERAL LAW. TO THE
EXTENT THAT STATE LAW IS APPLICABLE, Natural AND SHIPPER EXPRESSLY AGREE
THAT THE LAWS OF THE STATE OF ILLINOIS SHALL GOVERN THE VALIDITY,
CONSTRUCTION, INTERPRETATION AND EFFECT OF THIS CONTRACT, EXCLUDING,
HOWEVER, ANY CONFLICT OF LAWS RULE WHICH WOULD APPLY THE LAW OF ANOTHER
STATE. This Agreement states the entire agreement between the parties and
no waiver, representation, or agreement shall affect this Agreement unless
it is in writing.
AGREED TO BY:
NATURAL GAS PIPELINE COMPANY OF AMERICA NORTH SHORE GAS COMPANY
"Natural" "Shipper"
By: /s/ Stephen G. Weinan By: /s/ T. M. Patrick
---------------------- ----------------------
Name: Stephen G. Weinan Name: Thomas M. Patrick
---------------------- ----------------------
Title: Attorney in fact Title: Vice President
--------------------- --------------------
<PAGE>
EXHIBIT B
DATED December 01, 1995
EFFECTIVE DATE: December 01, 1995
COMPANY: NORTH SHORE GAS COMPANY
CONTRACT: 110386
DELIVERY POINT/S
County/Parish PIN MDQ
Name/Location Area State No. Zone (MMBTU)
- ------------- ------------- ----- --- ---- -------
PRIMARY DELIVERY POINT/S
1. NO SHORE/NGPL GRAYSLAKE LAKE IL 1 06 20000
LAKE INTERCONNECT WITH
NORTH SHORE GAS COMPANY
LOCATED IN SEC.
12-T44N-R10E, LAKE
COUNTY, ILLINOIS.
SECONDARY DELIVERY POINT/S
All secondary delivery points, and the related priorities and volumes, as
provided under the Tariff provisions governing this Agreement.
DELIVERY PRESSURE, ASSUMED ATMOSPHERIC PRESSURE
Natural gas to be delivered by Natural to Shipper, or for Shipper's
account, at the Delivery Point/s shall be at the pressure available in Natural's
pipeline facilities from time to time. The measuring party shall use or cause
to be used an assumed atmospheric pressure corresponding to the elevation at
such Delivery Point/s.
<PAGE>
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report, dated November 1, 1995, included in this Form 10-K,
into Peoples Energy Corporation's previously filed Registration Statement File
Nos. 2-82760, 2-88307, 33-6369 and 33-63193.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Chicago, Illinois,
December 21, 1995
<TABLE> <S> <C>
<PAGE>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Consolidated
Statements of Income, Consolidated Balance Sheets, Consolidated Statements of
Cash Flows, Consolidated Capitalization Statements and is qualified in its
entirety by reference to such Financial Statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> SEP-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,373,069
<OTHER-PROPERTY-AND-INVEST> 10,367
<TOTAL-CURRENT-ASSETS> 382,875
<TOTAL-DEFERRED-CHARGES> 16,475
<OTHER-ASSETS> 39,706
<TOTAL-ASSETS> 1,822,492
<COMMON> 277,113
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 364,581
<TOTAL-COMMON-STOCKHOLDERS-EQ> 641,694
0
0
<LONG-TERM-DEBT-NET> 621,874
<SHORT-TERM-NOTES> 900
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 4,000
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 554,024
<TOT-CAPITALIZATION-AND-LIAB> 1,822,492
<GROSS-OPERATING-REVENUE> 1,033,401
<INCOME-TAX-EXPENSE> 32,556
<OTHER-OPERATING-EXPENSES> 896,090
<TOTAL-OPERATING-EXPENSES> 928,646
<OPERATING-INCOME-LOSS> 104,755
<OTHER-INCOME-NET> 10,402
<INCOME-BEFORE-INTEREST-EXPEN> 115,157
<TOTAL-INTEREST-EXPENSE> 53,003
<NET-INCOME> 62,154
0
<EARNINGS-AVAILABLE-FOR-COMM> 62,154
<COMMON-STOCK-DIVIDENDS> 62,810
<TOTAL-INTEREST-ON-BONDS> 45,546
<CASH-FLOW-OPERATIONS> 225,535
<EPS-PRIMARY> 1.78
<EPS-DILUTED> 1.78
</TABLE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
---------------------------------
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 2-82760
A. Full title of the plan and address of the plan, if different from that of
the issuer named below:
PEOPLES ENERGY CORPORATION
EMPLOYE STOCK PURCHASE PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
Peoples Energy Corporation
130 East Randolph Drive
Chicago, Illinois 60601
<PAGE>
This Form 11-K is being filed for informational purposes only.
ITEM 1. AN AUDITED STATEMENT OF FINANCIAL CONDITION AS OF THE END OF THE
LATEST TWO FISCAL YEARS OF THE PLAN.
Not applicable. Employes' payments for Company stock are neither
segregated nor held for investment.
ITEM 2. AN AUDITED STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY FOR EACH OF
THE LATEST THREE FISCAL YEARS OF THE PLAN.
Not applicable. See above.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
Peoples Energy Corporation has duly caused this annual report to be signed on
its behalf by the undersigned hereunto duly authorized.
Peoples Energy Corporation
Employe Stock Purchase Plan
---------------------------
(Name of Plan)
Date: December 19, 1995 By: /s/ Emmet P. Cassidy
----------------- --------------------
(Signature)
Emmet P. Cassidy
Secretary and Treasurer
Peoples Energy Corporation
