Bangor Hydro and Energy Pacific to Build Natural Gas Distribution System for Eastern Maine.

BANGOR, Maine/LOS ANGELES--(BUSINESS WIRE)--Oct. 8, 1997--Bangor Hydro and Energy Pacific have agreed to form a joint-venture company that will seek approval from the Maine Public Utilities Commission (MPUC) to build, own and operate a natural gas distribution system to serve the greater Bangor area.

The two partners have formed Bangor Gas, LLC, which, pending the necessary approvals from the MPUC, will eventually provide gas service to residential, commercial and industrial customers in the Bangor area.

"Recent legislation which redefines the traditional role of the electric utility industry has opened doors for us at Bangor Hydro," said Robert S. Briggs, president of Bangor Hydro. "We want to provide our customers with a range of energy services, including natural gas. This new joint venture will enable us to offer natural gas as another energy choice for our customers."

Los Angeles-based Energy Pacific is a joint venture of Pacific Enterprises and Enova Corp., which are in the process of a corporate merger. Pacific Enterprises is the parent company of Southern California Gas Co., the nation's largest natural gas distribution company. Enova is the parent of San Diego Gas & Electric. Together, the two companies provide natural gas to approximately six million customers in California.

Pacific Enterprises and Bangor Hydro worked together in a partnership to develop the West Enfield Hydro Project in 1986.

Company officials estimate the cost to build and implement the new Bangor Gas system to be approximately $40 million.

"One of the core competencies of our parent companies is our experience and expertise in gas distribution, which we believe will serve us well in Maine," said Andrew Rea, vice president of business development for Energy Pacific. "We are very excited about combining this skill and experience with Bangor Hydro."

Gas service to Maine will be made economically feasible for the first time by the Maritimes and Northeast Pipeline Project, slated for completion in mid-1999. The new pipeline will extend from the Sable Offshore Energy Project near Sable Island, Nova Scotia, through the State of Maine and interconnecting with the Tennessee Gas Pipeline in Dracut, Mass.

The route, as proposed, comes through the city of Brewer, providing an opportunity for residences in the greater Bangor marketplace.

Consumers currently use fuel oil, electricity and propane to meet their energy needs. Market research indicates that nearly 50 percent of residential customers would have a strong interest in converting to natural gas if prices are lower than other fuels, as would 47 percent of small commercial/industrial customers and 70 percent of large commercial/industrial customers.

Research also indicates that natural gas prices are competitive with alternative fuel prices in the Bangor market.

Bangor Hydro and Energy Pacific plan to file in October of 1997 for MPUC approval to build the Bangor Gas system. Final approval, along with a utility rate structure, is expected in the second quarter of 1998.

Energy Pacific, an unregulated joint venture of Pacific Enterprises (NYSE:PET) and Enova Corp. (NYSE:ENA), is a multi-regional energy services company providing a wide range of products and services in California and throughout the United States.

Included are consumer products; commodity procurement and sales; energy management and retrofit services; energy services for utilities, municipalities and industrial customers; and customized offerings related to energy usage, information services and financing.

Bangor Hydro (NYSE:BGR) is the second-largest electric utility in Maine serving a population of 192,000 in a service territory extending approximately 5,200 square miles in eastern and east coastal Maine. The company is a member of the New England Power Pool and is interconnected with other New England utilities to the south and with New Brunswick Power Corp. to the north.

CONTACT: Pacific Enterprises

Mike Mizrahi, 213/244-3030

or

Bangor Hydro-Electric Co.

William Cohen, 207/990-6935

or

Enova Corp.

Doug Kline, 619/696-4292