Peoples Energy Completes Sale of Interest In Elwood Energy

  
    
  
  
    
      Peoples Energy Corporation (NYSE:PGL) today announced that it has 
      completed the sale of substantially all of its fifty percent interest in 
      Elwood Energy, LLC to J-Power USA Development Co. (J-Power). The Company 
      expects to close on the sale of its remaining power asset, a development 
      site in Oregon, to J-Power within the near future. As a result of these 
      transactions, the Company expects to record a net gain of approximately 
      $20 million on a pre-tax basis in the quarterly period ended March 31, 
      2007. Cash proceeds of approximately $110 million, which include 
      approximately $6 million of cash distributions received by the Company 
      from the Elwood partnership since agreement was reached with J-Power on 
      the sales in 2006, will be used to reduce short-term borrowing at 
      Peoples Energy Corporation. The Company will temporarily retain a 0.1% 
      interest in the Elwood partnership, but expects to transfer the 
      remaining Elwood interest to J-Power within 18 months.
    
    
      The sale of Elwood follows an announcement by Peoples Energy in 
      February, 2006, of its intent to divest its power assets and exit the 
      power generation business. The Company’s 
      interest in the Southeast Chicago Energy Project (SCEP) was sold to 
      Exelon Generation in May, 2006, for approximately $50 million. The 
      Company recognized a $4.1 million pre-tax gain as a result of that sale.
    
    
      Peoples Energy, a member of the S&P 500, is a diversified energy company 
      comprised of three primary business segments: Gas Delivery, Oil and Gas 
      Production and Energy Marketing. The Gas Delivery business serves about 
      one million retail customers in Chicago and northeastern Illinois. Visit 
      the Peoples Energy web site at www.PeoplesEnergy.com.
    
    
      Forward-Looking Information
    
    
      This press release contains forward-looking statements within the 
      meaning of Section 27A of the Securities Act of 1933 and Section 21E of 
      the Securities Exchange Act of 1934, such as the expected gain on the 
      company's sale of its interest in Southeast Chicago Energy Project. 
      Generally, the words "may", "could", "project", "believe", "anticipate", 
      "estimate", "plan", "forecast", "will be", and similar words identify 
      forward-looking statements. Actual results could differ materially from 
      such expectations because of many uncertainties, including, but not 
      limited to, the timing of the closing of the COB Energy sale and 
      approval of the transaction by governmental agencies. All 
      forward-looking statements included in this press release are based upon 
      information presently available, and Peoples Energy assumes no 
      obligation to update any forward-looking statements.