Providence Energy announces earnings for the first nine months of fiscal year 1996.

PROVIDENCE, R.I.--(BUSINESS WIRE)--Aug. 7, 1996--Providence Energy Corp. (AMEX-PVY) today reported earnings for the nine months ended June 30, 1996 of $2.11 per share of common stock, up almost 43 percent. Weather was the primary reason for the increase, with temperatures averaging about 17.6 percent colder than the same period last year. Weather for the first nine months of fiscal year 1996 was 5.5 percent colder than normal, adding about $1.8 million in margin, or 21 cents per share, net of tax.

The loss for the quarter ended June 30, 1996 was 16 cents per share of common stock, which is about equal to last year's third quarter loss. Losses in the summer months are typical for natural gas distribution company's in New England due to the seasonality of heating sales.

Margin for the first nine months of fiscal year 1996 was up about 16 percent, primarily as a result of colder weather and the rate increase which took effect in December 1995. In addition, the Company retained $1.5 million of annual gas cost savings through a Commission approved performance-based rate making mechanism, which was partially offset by a one-time funding of $800,000 for a Low Income Assistance Program (LIAP). Operating expenses for the first nine months of fiscal year 1996 increased about 13 percent, primarily due to expenses associated with the colder weather, LIAP, and the development of new energy businesses.

James H. Dodge, chairman, president and chief executive officer, stated, "In addition to continuing to find ways to expand sales, energy-market share, and new opportunities within our core gas distribution business, Providence Energy will be a major player in the providing of energy services to the entire New England region."

Gary S. Gillheeney, senior vice president and chief financial officer stated, "We continue our transition to a diversified energy company and thus far have incurred costs of about four cents per share, net of tax. We estimate costs to be between four and six cents per share, net of tax, in the fourth quarter of fiscal year 1996."

Providence Energy Corp.'s primary business is energy services. Providence Energy's largest subsidiary, Providence Gas Co., is Rhode Island's largest natural gas distribution company, providing service to over 160,000 homes and businesses in 25 cities and towns. -0-

         PROVIDENCE ENERGY CORPORATION AND SUBSIDIARIES
         SUMMARIZED CONSOLIDATED FINANCIAL INFORMATION
                 FOR THE PERIODS ENDED JUNE 30
                          (Unaudited)

                                          Three Months
                                  1996                    1995
                           (thousands, except per share amounts)

Operating revenues            $ 43,273                $ 38,157

Cost of gas sold                23,990                  21,244

Operating margin                19,283                  16,913

Operating expenses              18,377                  16,021

Operating income                   906                     892

Other income, net                  197                     303

Income before interest
 expense                         1,103                   1,195

Interest expense                 1,838                   1,865

Income after interest
 expense                          (735)                   (670)

Preferred dividends of
 subsidiary                       (174)                   (174)

Net income (loss)             $   (909)                $  (844)

Earnings per
 common share                 $   (.16)                $  (.15)

Dividends paid per
 common share                 $    .27                 $   .27

Weighted average common
 shares outstanding            5,718.3                 5,635.0

-0-

           PROVIDENCE ENERGY CORPORATION AND SUBSIDIARIES
            SUMMARIZED CONSOLIDATED FINANCIAL INFORMATION
                  FOR THE PERIODS ENDED JUNE 30
                           (Unaudited)

                                          Nine Months
                                  1996                    1995
                            (thousands, except per share amounts)

Operating revenues            $182,786                $153,621

Cost of gas sold               102,529                  84,215

Operating margin                80,257                  69,406

Operating expenses              63,006                  55,658

Operating income                17,251                  13,748

Other income, net                  984                     645

Income before interest
 expense                        18,235                  14,393

Interest expense                 5,711                   5,560

Income after interest
 expense                        12,524                   8,833

Preferred dividends of
 subsidiary                       (522)                   (522)

Net income (loss)             $ 12,002                $  8,311

Earnings per
 common share                 $   2.11                $   1.48

Dividends paid per
 common share                 $    .81                $    .81

Weighted average common
 shares outstanding            5,699.5                 5,613.2

-0-

         PROVIDENCE ENERGY CORPORATION AND SUBSIDIARIES
          SUMMARIZED CONSOLIDATED FINANCIAL INFORMATION
                 FOR THE PERIODS ENDED JUNE 30
                          (Unaudited)

                                          Twelve Months
                                  1996                    1995
                            (thousands, except per share amounts)

Operating revenues            $213,157                $187,380

Cost of gas sold               119,258                 103,435

Operating margin                93,899                  83,945

Operating expenses              77,059                  69,058

Operating income                16,840                  14,887

Other income, net                1,204                     306

Income before interest
 expense                        18,044                  15,193

Interest expense                 7,530                   7,138

Income after interest
 expense                        10,514                   8,055

Preferred dividends of
 subsidiary                       (696)                   (696)

Net income (loss)              $ 9,818                 $ 7,359

Earnings per
 common share                  $  1.73                 $  1.31

Dividends paid per
 common share                  $  1.08                 $  1.08

Weighted average common
 shares outstanding            5,688.9                 5,602.4

CONTACT: Linda S. Lennox

Director of Investor Relations

401/272-5040 x2469