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PEOPLES ENERGY ANNOUNCES COST-CONTROL MEASURES

 CHICAGO, Sept. 9 /PRNewswire/ -- Peoples Energy Corp. (NYSE: PGL) today announced that it is undertaking a series of measures to help control costs and maintain its competitive position in local energy markets.
 The moves apply to the company's two utility subsidiaries, Peoples Gas in Chicago, and North Shore Gas, which serves 54 suburban communities.
 In making the announcement, Richard E. Terry, chairman of Peoples Energy, said that gas prices at the wellhead have increased nationwide, leading in turn to higher gas costs for the utilities. In addition, the utilities' pipeline suppliers are charging higher rates, primarily due to new federal regulatory policies.
 "Despite efforts to control our gas-purchase costs, these higher costs likely will result in continued conservation by users," Terry said. "Our utilities, at the same time, also are facing rising operating and maintenance costs and local energy markets that are becoming more competitive.
 "So far, Peoples Gas and North Shore Gas have been successful in maintaining market share in this competitive environment. Nevertheless, it's essential that further actions be taken to control costs."
 The utilities already have taken, or are planning, several actions, among them:
 -- Capital spending in 1994 is being reduced by some $31 million, to $102.5 million. The company said the reduction is consistent with its efforts to maintain an appropriate capital structure.
 -- A hiring freeze is in effect with a goal of decreasing the workforce -- through attrition -- by about 150 employes.
 -- Additional cost-saving measures also are underway, including efforts to lower borrowing costs, trim advertising expenditures, and further control overtime work hours.
 The company emphasized that these moves will not impair the safety and reliability of the utilities' facilities or their services to customers.
 These cost-saving actions are being announced by Terry in a letter going out today to the utilities' nearly 3,500 employes.
 -0- 9/9/93
 /CONTACT: Ed Joyce of Peoples Energy, 312-431-4567/
 (PGL)


CO: Peoples Energy Corp. ST: Chicago IN: OIL SU:

JL-CM -- CH010 -- 0267 09/09/93 11:14 EDT
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Publication:PR Newswire
Date:Sep 9, 1993
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