Peoples Energy Services Wins Electric Supply Pact From Fermilab

Peoples Energy Services Corporation, one of the largest
deregulated energy marketers in northern Illinois, announced today it
has won a $30.2 million contract to supply electricity for the
Department of Energy's Fermi National Accelerator Laboratory in
Batavia, Ill. The supply contract begins in December 2006 and covers
the 12-month period ending December 2007.
   "Peoples Energy Services is very pleased to be chosen to supply
electricity to Fermilab. We realize that Fermilab plays a critical
role in the world of science and technology," said Ann DeBortoli, vice
president of Peoples Energy Services. "Our team is proud and committed
to this important partnership and we look forward to building a
long-term relationship with Fermilab."
   Through this contract, Fermilab will become one of Peoples Energy
Services largest electricity customers. Fermilab uses more than 400
million-kilowatt hours of electricity annually, which is enough to
power 50,000 homes.
   Launched in 1996, Peoples Energy Services serves more than 25,000
customers, the company provides a portfolio of products to manage
energy needs of business, institutional and residential consumers in
today's volatile and complex energy market. The company's performance
and commitment to customers is reflected in the fact that more than
90% of current customers consistently renew their relationship each
year. The company recently won approval to offer services in Michigan,
Ohio and New York.

   A subsidiary of Peoples Energy Corporation (NYSE:PGL), Peoples
Energy Services is the preferred natural gas supplier for the Illinois
Energy Consortium, State of Illinois, IUPC and the Illinois Retail
Merchants Association. Visit PeoplesEnergyServices.com for more
information.

   Peoples Energy, a member of the S&P 500, is a diversified energy
company consisting of five primary business segments: Gas
Distribution, Oil and Gas Production, Power Generation, Energy
Marketing and Energy Assets. Visit the Peoples Energy web site at
PeoplesEnergyServices.com.