Providence Energy announces earnings second quarter fiscal year 1997.

PROVIDENCE, R.I.--(BUSINESS WIRE)--April 30, 1997--Providence Energy Corporation (NYSE-PVY) today reported earnings for the three months ended March 31, 1997, of $1.17 per share of common stock, down 14.7 percent from last year's second quarter. Temperatures for the three months ended March 31, 1997 were 10.7 percent warmer than the same period last year and 5.2 percent warmer than normal. Warmer weather reduced margin by about $1.8 million or 21 cents per share, net of tax, when compared to the same period last year.

Operating expenses for the current quarter increased due to inflation, costs associated with infrastructure and technology investments and the operations of Providence Energy Services, Inc. which began in August 1996. These increases were partially offset by a reduction in uncollectible expense resulting from improved collection efforts.

Earnings for the six months ended March 31, 1997 were $1.91, down 15.9 percent due mainly from weather, which was 8.4 percent warmer than the same period last year, reducing margin by about $2.4 million or 28 cents per share, net of tax. This weather impact was partially offset by the rate increase effective December 17, 1995. Operating expenses for the first half of this current fiscal year increased due to increased operating expenses for the second quarter. Gary S. Gillheeney, Senior Vice President, Chief Financial Officer and Treasurer stated, "Aside from the costs associated with the development of new energy ventures, we expect operating expenses to be lower for the remainder of the year versus last year due to aggressive monitoring of costs and a one time funding of $800,000 for the low income assistance program last year." Other for 1996 reflects the impact of one time adjustments from the rate order issued earlier that year.

James H. Dodge, Chairman, President and Chief Executive Officer stated, "We are pleased with the progress of Providence-Southern, our new energy venture with the Southern Company. The Company is on target in both its marketing and organizational efforts. This new venture strongly positions our Company to meet its vision of being New England's First Choice In Energy Services."

Providence Energy Corporation is a diversified energy services company. The Corporation owns and operates two natural gas distribution companies, the Providence Gas Company, which is the largest natural gas distributor in Rhode Island, and North Attleboro Gas Company in Massachusetts. The Corporation has recently joined with the Southern Company of Atlanta, Georgia to form a new company, Providence-Southern, LLC, to market natural gas and electricity throughout the New England market.

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Forward-looking statements in this document are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including, without limitation those risks detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission.

         PROVIDENCE ENERGY CORPORATION AND SUBSIDIARIES
         SUMMARIZED CONSOLIDATED FINANCIAL INFORMATION
                  FOR THE PERIOD ENDED MARCH 31
                          (Unaudited)


                                  Three Months        Six Months
                                1997       1996     1997      1996
                               (thousands, except per share amounts)

Operating revenues             $79,946   $81,107  $143,984  $139,513

Cost of gas sold                46,938    47,018    84,218    78,539

Operating margin                33,008    34,089    59,766    60,974

Operating expenses              20,638    20,251    38,649    38,145

Operating income                12,370    13,838    21,117    22,829

Other                               77       193       (42)    1,148

Interest expense                 1,979     1,965     3,849     3,873

Income before Federal income
 taxes                          10,468    12,066    17,226    20,104

Provision for Federal income
 taxes                           3,557     4,104     5,877     6,845

Preferred dividends of
 subsidiary                       (174)     (174)     (348)     (348)

Net income                     $ 6,737   $ 7,788   $11,001   $12,911

Earnings per common share      $  1.17   $  1.37   $  1.91   $  2.27

Dividends paid per common
 share                         $  0.27   $  0.27   $  0.54   $  0.54

Weighted average common
 shares outstanding            5,779.2   5,700.1   5,768.5   5,690.1

CONTACT: Providence Energy Corp.

Investor Contact: Media Contact:

Maryann Pernorio Barbara H. Trainor

[phone], Ext. 2274 [phone], Ext. 2411