Contributed report

Alagasco customers will pay higher natural gas prices recently set a new record primarily as a result of reduced natural gas production and processing capacity in the Gulf of Mexico following back-to-back hurricanes Katrina and Rita. These higher wholesale commodity prices are affecting all natural gas consumers nationwide. The impacts of these two hurricanes on gulf coast supply aggravated the already uptight supply/demand situation that has existed throughout the United States during the last five years. As a result of these market conditions, effective October 1, 2005, the average Alagasco residential customer using 635 ccf per year will pay $1,279.99 per year including state utility taxes, an increase of 36.7 percent. The impact on individual customers will vary depending on weather and consumption.

“We want to work with our customers to help them get through this difficult period,” said Dudley Reynolds, Alagasco President. “One way we can do this is by letting them know in advance how much more they can expect to pay so they can start planning for their winter heating bills. The sooner customers begin preparing, the better.”

The single biggest factor affecting a customer’s bill continues to be the customer’s individual usage. Alagasco joins other natural gas utilities encouraging its customers to practice energy conservation. The months prior to the heating season are a good time to do inexpensive home improvements that will increase efficiency and reduce energy costs later. Customers looking for energy saving tips can find them at www.alagasco.com or by picking up a conservation brochure at an Alagasco office.

Alagasco encourages customers who are current on their accounts to sign up for the Company’s budget plan. The budget plan reduces the customer’s payment during the winter months when consumption is higher and increases the payment during summer months when consumption is lower. Customers needing assistance paying their bills should call Alagasco as soon as they realize there is a problem. The Company has a large number of customer assistance programs in place to help those in need of assistance. In addition, Alagasco can refer customers to other agencies that may be able to provide customers direct assistance with paying their bills.

“We have a long history of working with our customers,” Reynolds said. “We simply ask our customers to give us an opportunity to work with them before a bill payment problem occurs.”

Natural gas, while experiencing high costs right now, continues to be the cleanest burning and most efficient fuel for our customers’ energy needs.

Alagasco is the largest natural gas company in the state of Alabama. The Company has been in business 153 years and serves 460,000 customers throughout central Alabama.