A subsidiary of Peoples Energy Corporation, The Peoples Gas Light and Coke Company ("Peoples Gas"), announced that it will inspect for mercury contamination the premises of approximately 30,000 small-volume customers (predominantly homes) in Chicago, Illinois where gas pressure regulators containing mercury could have been used in the past. Peoples Gas believes that virtually all regulators containing mercury used in its distribution system were removed by the early 1980s. Peoples Gas has commenced visual inspections at these locations. As of September 25, 2000, Peoples Gas had inspected 21,948 premises. Low levels of mercury have been found in approximately one of every 1,700 premises inspected.

Peoples Gas is also inspecting for mercury contamination approximately 1,800 large-volume gas customer locations where other mercury-containing equipment could have been used in the past, such as industrial and commercial businesses, schools and hospitals. Peoples Gas is conducting combined visual and instrument inspections of these sites. As of September 25, 2000, Peoples Gas had performed approximately 666 inspections at these locations. Mercury has been found at 14 of the locations inspected.

North Shore Gas Company ("North Shore Gas"), another subsidiary of the Company, also announced that it will inspect for mercury contamination the premises of approximately 55,000 small-volume customers (predominantly homes) in those areas of its service territory in Northeastern Illinois where gas pressure regulators containing mercury could have been used. As of September 25, 2000, low levels of mercury have been found at five of the premises.

North Shore Gas is also inspecting for mercury contamination approximately 350 large-volume gas customer locations where mercury-containing equipment could have been used in the past, such as industrial and commercial businesses, schools and hospitals. As of September 25, 2000, combined visual and instrument inspections of these locations has revealed mercury at one such location.

In each case where mercury contamination is found, Peoples Gas or North Shore Gas will clean up the mercury. Peoples Gas and North Shore Gas continue to investigate their use of any mercury-containing equipment.