(Philadelphia, PA – March 1, 2006) – The Philadelphia Gas Works (PGW) today filed a request with the Pennsylvania Public Utility Commission (PUC) to reduce its annual Gas Cost Rate (GCR) by $8.2 million, effective September 1, 2006.

If approved, the new rate would reduce the monthly bill of a typical residential heating customer using 100 thousand cubic feet (Mcf) of natural gas a year from $172.21 to $170.64 per month, or approximately 0.9 percent.

Other customer classifications would be affected as follows: the monthly bill of a typical commercial heating customer using 459 Mcf a year would be reduced from $757 to $750, or by approximately 1.0 percent; the monthly bill of a typical industrial heating customer using 1,215 Mcf a year would be reduced from $2,006 to $1,987, or by approximately 1.0 percent; the monthly bill of a municipal service heating customer using 1,856 Mcf a year would be reduced from $2,827 to $2,798, or approximately 1.0 percent; and the monthly bill for a typical Philadelphia Housing Authority (PHA) heating customer using 644 Mcf a year would be reduced from $1,054 to $1,044, or approximately 1.0 percent.

The proposed reductions are the result of a projected rate decrease of $0.1886 per Mcf based upon a comparison between the GCR in effect on December 1 ($12.5632 per Mcf) and the projected rate in PGW’s annual rate filing ($12.3746 Mcf).

The GCR is designed to recover the cost of natural gas that PGW purchases from gas suppliers. The rate may be recalculated to show actual costs on a quarterly basis. The quarterly filing dates are March 1, June 1, September 1, and December 1. The rate may change if the recalculated rate is different from the rate that is approved in PGW’s annual filing by more than 2 percent. In addition to filing for the annual GCR reduction, PGW also announced today that it will not make a quarterly GCR adjustment on March 1, 2006.

To find out more about the filing, customers may contact PGW at 215-235-1000 or examine the material that was filed with the PUC at PGW’s main office, 800 W. Montgomery Avenue, Philadelphia, PA, Monday through Friday, 9 a.m. to 5 p.m.

Customers may challenge PGW’s request to change rates by filing a formal complaint or by sending the PUC a letter explaining why they object to the rate change request to the Pennsylvania Public Utility Commission, P.O. Box 3265, Harrisburg, PA 17105. The contact number for the PUC is 1-800-728-1110. Complaint forms are available on the PUC Web site:
http://www.puc.state.pa.us/general/onlineformes/pdf/official_complaint_form_final.pdf

Founded in 1836, PGW is the nation’s largest municipally owned natural gas utility, serving a half million residential, commercial, and industrial customers in the City of Philadelphia.