City Gas Company of Florida files request for new rates to reflect modernization and system improvement.

HIALEAH, Fla.--(BUSINESS WIRE)--June 18, 1996--City Gas Company of Florida, a division of NUI Corporation (NYSE: NUI), today filed with the Florida Public Service Commission (PSC) a request to increase its base rates by $5.3 million reflecting, in part, the significant operational and systems improvements made by the company since the last base rate filing in 1994.

These steps were implemented to improve divisional controls and profitability, enhance customer service and reposition the company to address the increasingly competitive gas distribution marketplace. This process, which has entailed more fully integrating NUI's support and systems functions for all six of its utilities, has effectively upgraded the systems and managerial support for the City Gas operations.

Today's filing also reflects $18.9 million of ongoing system upgrade and expansion through the coming fiscal year, bringing the company's proposed Florida rate base to $94.4 million. Under the proposal, City Gas's return on equity would be 11.9 percent, with an overall allowed rate of return of 8.25 percent.

In announcing the filing, City Gas President, Lyle C. Motley, Jr., explained, "The natural gas industry has entered a new, more challenging environment. Federal and state initiatives have thrust natural gas distribution companies like City Gas into a highly competitive market. While increased competition will ultimately benefit consumers, it has required City Gas to undergo profound changes in order to be successful. Our investments in systems and technology and improved management help to fulfill our commitment to our customers, investors, and the economic well-being of the state."

The proposal includes an average increase for customers of approximately 8 percent, with a new rate structure that more fairly reflects the true cost of serving different classes of customers. The filing also proposes a segmentation of the commercial class,providing more competitive rates to large volume users that have access to alternative energy sources, as well as more flexible ratesetting for certain large volume customers.

Over the past two years, City Gas has also realigned its management infrastructure. Motley pointed out that the integration of management within a larger organization like NUI Corporation allows City Gas to benefit from a level of experience and knowledge it would be unable to achieve on a stand-alone basis.

City Gas Company of Florida serves nearly 100,000 customers in Dade, Broward, Brevard, Indian River and St. Lucie counties. It is a division of NUI Corporation, headquartered in Bedminster, NJ, a multistate gas distribution, sales and services company serving more than 360,000 customers along the eastern seaboard. In addition to City Gas, NUI's utility operations include Elizabethtown Gas (NJ), North Carolina Gas Service, Valley Cities Gas Service (PA), Elkton Gas Service (MD) and Waverly Gas Service (NY).

CONTACT: Rick Wall (Florida) [phone], ext. 152

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Alexandra Pruner (New Jersey) [phone]