SCG Rate Settlement Approved

Hartford, CT, December 28, 2005 -  The Connecticut Department of Public Utility Control (DPUC) approved a Rate Settlement Agreement between The Southern Connecticut Gas Company, The Office of Consumer Counsel ("OCC"), DPUC Prosecutorial Division, and two retail gas Markters, Amerada Hess and Select Energy. This settlement agreement and the associated rate increase became effective January 1, 2006.

As a result of this settlement, all firm customers' delivery charges will increase to reflect the DPUC's approved 8.4% overall rate increase. This uniform rate increase will remain in effect until the rate design portion of this docket is concluded in late 2006. At that time, the uniform rate increase will be re-allocated to the various firm rate classes and be reflected in the various rate components of customers' bills in accordance with the then approved DPUC decision.

The approved settlement agreement requires the company to reflect the current cost of gas in the firm commodity charge on your bill. Future months PGA rates will reflect the difference between current gas costs at that time and this revised firm commodity charge.

Lastly, as a result of the settlement agreement, any commercial and industrial customer that does not currently have a daily demand meter installed at their site will no longer be charged the monthly $6.37 telemetering charge. This change is effective January, 2006. On an ongoing basis, this telemetering charge will apply only after such metering equipment is installed at the customer's premises. The approved settlement agreement requires that refunds for prior telemetering charges, to the affected customers, be applied beginning in February, 2006.

If you have any questions about your bill, please call a customer service representative at 800-659-8299.