**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      DC 20549**

**FORM      10-Q**

| [X] | QUARTERLY                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934 |
|-----|--------------------------------------------------------------------------------------------------------------------------------------|

**June      30, 2005**

| [                ] | TRANSITION                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934 |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------|

**000-22211**

**SOUTH      JERSEY GAS COMPANY**

| **New                Jersey**                 | **21-0398330**                              |
|-----------------------------------------------|--------------------------------------------------|
|  (State                of incorporation) | (IRS                employer identification no.) |

**1      South Jersey Plaza, Folsom, NJ 08037**

**(609)      561-9000**

----

----

| **SOUTH                    JERSEY GAS COMPANY**                                                                    |   |
|--------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                               |   |   |   |   |   |
| **CONDENSED                    STATEMENTS OF INCOME (UNAUDITED)**                                                  |   |
| (In                    Thousands)                                                                                  |   |
|                                                                                                               |   |   |   |   |   |
|                                                                                                                    |   | Three                    Months Ended |
|                                                                                                                    |   | June                    30, |
|                                                                                                               |   |   | 2005 |   |   | 2004 |   |
|                                                                                                               |   |   |  |   |   |  |   |
|                                                                                                               |   |   |   |   |   |   |   |
| **Operating                    Revenues**                                                                          |   | $ | 86,083 |   | $ | 75,970 |   |
|                                                                                                               |   |   |  |   |   |  |   |
| **Operating                    Expenses:**                                                                         |   |   |   |   |   |   |   |
| Cost                    of Sales                                                                                   |   |   | 55,111 |   |   | 47,066 |   |
| Operations                                                                                                         |   |   | 11,939 |   |   | 13,170 |   |
| Maintenance                                                                                                        |   |   | 1,511 |   |   | 1,439 |   |
| Depreciation                                                                                                       |   |   | 5,437 |   |   | 6,303 |   |
| Energy                    and Other Taxes                                                                          |   |   | 1,952 |   |   | 1,983 |   |
|                                                                                                               |   |   |  |   |   |  |   |
| Total                    Operating Expenses                                                                        |   |   | 75,950 |   |   | 69,961 |   |
|                                                                                                               |   |   |  |   |   |  |   |
| **Operating                    Income**                                                                            |   |   | 10,133 |   |   | 6,009 |   |
|                                                                                                               |   |   |   |   |   |   |   |
| **Other                    Income and Expense**                                                                    |   |   | (9 | ) |   | (8 | ) |
|                                                                                                               |   |   |   |   |   |   |   |
| **Interest                    Charges**                                                                            |   |   | 4,193 |   |   | 4,348 |   |
|                                                                                                               |   |   |  |   |   |  |   |
| **Income                    Before Income Taxes**                                                                  |   |   | 5,931 |   |   | 1,653 |   |
|                                                                                                               |   |   |   |   |   |   |   |
| **Income                    Taxes**                                                                                |   |   | 2,577 |   |   | 830 |   |
|                                                                                                               |   |   |  |   |   |  |   |
| **Net                    Income**                                                                                  |   | $ | 3,354 |   | $ | 823 |   |
|                                                                                                               |   |   |  |   |   |  |   |
|                                                                                                               |   |   |   |   |   |   |   |
|                                                                                                               |   |   |   |   |   |   |   |
| The                    accompanying footnotes are an integral part of the financial                    statements. |   |   |   |   |   |   |   |

----

|                                                                                                               |   |                                |    |   |   |
|--------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|---------|--------|--------|
| **SOUTH                    JERSEY GAS COMPANY**                                                                    |   |
|                                                                                                               |   |                                |    |   |   |
| **CONDENSED                    STATEMENTS OF INCOME (UNAUDITED)**                                                  |   |
| (In                    Thousands)                                                                                  |   |
|                                                                                                               |   |                                |    |   |   |
|                                                                                                               |   | Six                    Months Ended |    |
|                                                                                                               |   | June                    30,         |    |
|                                                                                                               |   | 2005                                |    | 2004   |   |
|                                                                                                               |   |                                |    |   |   |
|                                                                                                               |   |                                |    |   |   |   |   |
| **Operating                    Revenues**                                                                          |   | $                                   | 300,620 |   | $      | 278,230 |   |
|                                                                                                               |   |                                |         |   |   |  |   |
| **Operating                    Expenses:**                                                                         |   |                                |    |   |   |   |   |
| Cost                    of Sales                                                                                   |   |                                | 199,455 |   |   | 184,162 |   |
| Operations                                                                                                         |   |                                | 27,228  |   |   | 26,956 |   |
| Maintenance                                                                                                        |   |                                | 3,004   |   |   | 2,784 |   |
| Depreciation                                                                                                       |   |                                | 10,795  |   |   | 12,466 |   |
| Energy                    and Other Taxes                                                                          |   |                                | 6,846   |   |   | 6,711 |   |
|                                                                                                               |   |                                |         |   |   |  |   |
| Total                    Operating Expenses                                                                        |   |                                | 247,328 |   |   | 233,079 |   |
|                                                                                                               |   |                                |         |   |   |  |   |
| **Operating                    Income**                                                                            |   |                                | 53,292  |   |   | 45,151 |   |
|                                                                                                               |   |                                |    |   |   |   |   |
| **Other                    Income and Expense**                                                                    |   |                                | (38     | )      |   | 559 |   |
|                                                                                                               |   |                                |    |   |   |   |   |
| **Interest                    Charges**                                                                            |   |                                | 8,633   |   |   | 8,668 |   |
|                                                                                                               |   |                                |         |   |   |  |   |
| **Income                    Before Income Taxes**                                                                  |   |                                | 44,621  |   |   | 37,042 |   |
|                                                                                                               |   |                                |    |   |   |   |   |
| **Income                    Taxes**                                                                                |   |                                | 18,702  |   |   | 15,513 |   |
|                                                                                                               |   |                                |         |   |   |  |   |
| **Net                    Income**                                                                                  |   | $                                   | 25,919  |   | $      | 21,529 |   |
|                                                                                                               |   |                                |         |   |   |  |   |
|                                                                                                               |   |                                |    |   |   |   |   |
|                                                                                                               |   |                                |    |   |   |   |   |
|                                                                                                               |   |                                |    |   |   |   |   |
| The                    accompanying footnotes are an integral part of the financial                    statements. |   |                                |    |   |   |   |   |
|                                                                                                               |   |                                |    |   |   |   |   |

----

| **SOUTH                JERSEY GAS COMPANY**                                                                |   |
|------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                       |   |    |   |   |   |
| **CONDENSED                STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)**                                |   |
| (In                Thousands)                                                                              |   |
|                                                                                                       |   |    |   |   |   |
|                                                                                                       |   |  Three                Months Ended |   |
|                                                                                                       |   |  June                30, |   |
|                                                                                                       |   |  2005 |   | 2004 |   |
|                                                                                                       |   |    |   |   |   |
|                                                                                                       |   |   |   |   |   |   |   |
|                                                                                                       |   |   |   |   |   |   |   |
| **Net                Income**                                                                              |   | $ | 3,354 |   | $ | 823 |   |
|                                                                                                       |   |   |   |   |   |   |   |
| **Other                Comprehensive Income (Loss), Net of Tax:***                                         |   |   |   |   |   |   |   |
|                                                                                                       |   |   |   |   |   |   |   |
| Change                in Fair Value of Investments                                                         |   |   | 121 |   |   | (26 | ) |
| Change                in Fair Value of Derivatives                                                         |   |   | (615 | ) |   | 4 |   |
|                                                                                                       |   |   |   |   |   |   |   |
| Other                Comprehensive Loss - Net of Tax*                                                      |   |   | (494 | ) |   | (22 | ) |
|                                                                                                       |   |   |   |   |   |   |   |
| **Comprehensive                Income**                                                                    |   | $ | 2,860 |   | $ | 801 |   |
|                                                                                                       |   |   |   |   |   |   |   |
|                                                                                                       |   |   |   |   |   |   |   |
|                                                                                                       |   |   |   |   |   |   |   |
|                                                                                                       |   | Six                Months Ended  |
|                                                                                                            |   |  June                30, |
|                                                                                                       |   |   | 2005 |   |   | 2004 |   |
|                                                                                                       |   |   |   |   |   |   |   |
|                                                                                                       |   |   |   |   |   |   |   |
|                                                                                                       |   |   |   |   |   |   |   |
| **Net                Income**                                                                              |   | $ | 25,919 |   | $ | 21,529 |   |
|                                                                                                       |   |   |   |   |   |   |   |
| **Other                Comprehensive Income (Loss), Net of Tax:***                                         |   |   |   |   |   |   |   |
|                                                                                                       |   |   |   |   |   |   |   |
| Change                in Fair Value of Investments                                                         |   |   | 78 |   |   | (301 | ) |
| Change                in Fair Value of Derivatives                                                         |   |   | (718 | ) |   | 4 |   |
|                                                                                                       |   |   |   |   |   |   |   |
| Other                Comprehensive Loss - Net of Tax*                                                      |   |   | (640 | ) |   | (297 | ) |
|                                                                                                       |   |   |   |   |   |   |   |
| **Comprehensive                Income**                                                                    |   | $ | 25,279 |   | $ | 21,232 |   |
|                                                                                                       |   |   |   |   |   |   |   |
|                                                                                                       |   |   |   |   |   |   |   |
|                                                                                                       |   |   |   |   |   |   |   |
| *                Determined using a combined statutory tax rate of 40.85%.                                 |   |   |   |   |   |   |   |
|                                                                                                       |   |   |   |   |   |   |   |
| The                accompanying footnotes are an integral part of the financial                statements. |   |   |   |   |   |   |   |
|                                                                                                       |   |   |   |   |   |   |   |

----

| **SOUTH                  JERSEY GAS COMPANY**                                                                  |   |
|----------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                           |   |   |   |   |   |
| **CONDENSED                  STATEMENTS OF CASH FLOWS (UNAUDITED)**                                            |   |
| (In                  Thousands)                                                                                |   |
|                                                                                                           |   |   |   |   |   |
|                                                                                                           |   | Six                  Months Ended |   |
|                                                                                                           |   | June                  30, |   |
|                                                                                                           |   | 2005 |   | 2004 |   |
|                                                                                                           |   |   |  |   |   |  |   |
| **Cash                  Flows from Operating Activities:**                                                     |   |   |   |   |   |   |   |
| Net                  Income                                                                                    |   | $ | 25,919 |   | $ | 21,529 |   |
| Adjustments                  to Reconcile Net Income to Net Cash                                               |   |   |   |   |   |   |   |
| Provided                  by Operating Activities:                                                             |   |   |   |   |   |   |   |
| Depreciation                  and Amortization                                                                 |   |   | 12,238 |   |   | 13,632 |   |
| Provision                  for Losses on Accounts Receivable                                                   |   |   | 838 |   |   | 461 |   |
| Revenues                  and Fuel Costs Deferred - Net                                                        |   |   | (4,943 | ) |   | 12,784 |   |
| Deferred                  and Non-Current Income Taxes and Credits - Net                                       |   |   | 5,526 |   |   | 6,326 |   |
| Environmental                  Remediation Costs - Net                                                         |   |   | (797 | ) |   | (1,216 | ) |
| Gas                  Plant Cost of Removal                                                                     |   |   | (443 | ) |   | (400 | ) |
| Changes                  in:                                                                                   |   |   |   |   |   |   |   |
| Accounts                  Receivable                                                                           |   |   | 16,512 |   |   | 25,515 |   |
| Inventories                                                                                                    |   |   | 16,049 |   |   | 9,317 |   |
| Prepayments                  and Other Current Assets                                                          |   |   | (1,678 | ) |   | (755 | ) |
| Prepaid                  and Accrued Taxes - Net                                                               |   |   | (2,233 | ) |   | (15,423 | ) |
| Accounts                  Payable and Other Accrued Liabilities                                                |   |   | (5,890 | ) |   | 9,326 |   |
| Other                  Assets                                                                                  |   |   | 5,808 |   |   | 3,382 |   |
| Other                  Liabilities                                                                             |   |   | (1,586 | ) |   | (1,010 | ) |
|                                                                                                           |   |   |  |   |   |  |   |
| Net                  Cash Provided by Operating Activities                                                     |   |   | 65,320 |   |   | 83,468 |   |
|                                                                                                           |   |   |  |   |   |  |   |
| **Cash                  Flows from Investing Activities:**                                                     |   |   |   |   |   |   |   |
| Capital                  Expenditures                                                                          |   |   | (30,295 | ) |   | (32,055 | ) |
|                                                                                                           |   |   |  |   |   |  |   |
| Net                  Cash Used in Investing Activities                                                         |   |   | (30,295 | ) |   | (32,055 | ) |
|                                                                                                           |   |   |  |   |   |  |   |
| **Cash                  Flows from Financing Activities:**                                                     |   |   |   |   |   |   |   |
| Net                  Repayments of Lines of Credit                                                             |   |   | (15,500 | ) |   | (59,500 | ) |
| Principal                  Repayments of Long-Term Debt                                                        |   |   | (12,773 | ) |   | (6,773 | ) |
| Redemption                  of Preferred Stock                                                                 |   |   | (1,690 | ) |   | - |   |
| Dividends                  on Common Stock                                                                     |   |   | (5,626 | ) |   | - |   |
| Premium                  for Early Retirement of Debt                                                          |   |   | (184 | ) |   | - |   |
| Payments                  for Issuance of Long-Term Debt                                                       |   |   | (100 | ) |   | (42 | ) |
| Additional                  Investment by Shareholder                                                          |   |   | - |   |   | 15,000 |   |
|                                                                                                           |   |   |  |   |   |  |   |
| Net                  Cash Used in Financing Activities                                                         |   |   | (35,873 | ) |   | (51,315 | ) |
|                                                                                                           |   |   |  |   |   |  |   |
| **Net                  (Decrease) Increase in Cash and Cash Equivalents**                                      |   |   | (848 | ) |   | 98 |   |
| **Cash                  and Cash Equivalents at Beginning of Period**                                          |   |   | 3,310 |   |   | 3,210 |   |
|                                                                                                           |   |   |  |   |   |  |   |
| **Cash                  and Cash Equivalents at End of Period**                                                |   | $ | 2,462 |   | $ | 3,308 |   |
|                                                                                                           |   |   |  |   |   |  |   |
| The                  accompanying footnotes are an integral part of the financial                  statements. |   |   |   |   |   |   |   |
|                                                                                                           |   |   |   |   |   |   |   |

----

| **SOUTH                    JERSEY GAS COMPANY**                                                                    |   |
|--------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                               |   |    |   |   |   |   |   |
| **CONDENSED                    BALANCE SHEETS (UNAUDITED)**                                                        |   |
| (In                    Thousands)                                                                                  |   |
|                                                                                                               |   |    |   |   |   |   |   |
|                                                                                                               |   |  June                    30, | December                    31, |   |  |   |
|                                                                                                               |   |  2005 |   | 2004 |   |   |   |
|                                                                                                               |   |   |  |   |   |  |   |   |
| **Assets**                                                                                                         |   |   |   |   |   |   |   |   |
|                                                                                                               |   |   |   |   |   |   |   |   |
| **Property,                    Plant and Equipment:**                                                              |   |   |   |   |   |   |   |   |
| Utility                    Plant, at original cost                                                                 |   | $ | 984,100 |   | $ | 957,287 |   |   |
| Accumulated                    Depreciation                                                                        |   |   | (231,588 | ) |   | (224,506 | ) |   |
|                                                                                                               |   |   |  |   |   |  |   |   |
| Property,                    Plant and Equipment - Net                                                             |   |   | 752,512 |   |   | 732,781 |   |   |
|                                                                                                               |   |   |  |   |   |  |   |   |
| **Investments:**                                                                                                   |   |   |  |   |   |  |   |   |
| Available-for-Sale                    Securities                                                                   |   |   | 5,326 |   |   | 5,296 |   |   |
|                                                                                                               |   |   |  |   |   |  |   |   |
| **Current                    Assets:**                                                                             |   |   |   |   |   |   |   |   |
| Cash                    and Cash Equivalents                                                                       |   |   | 2,462 |   |   | 3,310 |   |   |
| Accounts                    Receivable                                                                             |   |   | 52,882 |   |   | 39,916 |   |   |
| Unbilled                    Revenues                                                                               |   |   | 4,835 |   |   | 34,861 |   |   |
| Provision                    for Uncollectibles                                                                    |   |   | (3,161 | ) |   | (2,871 | ) |   |
| Natural                    Gas in Storage, average cost                                                            |   |   | 49,369 |   |   | 65,691 |   |   |
| Materials                    and Supplies, average cost                                                            |   |   | 4,826 |   |   | 4,553 |   |   |
| Prepaid                    Taxes                                                                                   |   |   | 12,556 |   |   | 6,104 |   |   |
| Derivatives                    - Energy Related Assets                                                             |   |   | 2,717 |   |   | 1,273 |   |   |
| Other                    Prepayments and Current Assets                                                            |   |   | 3,756 |   |   | 2,078 |   |   |
|                                                                                                               |   |   |  |   |   |  |   |   |
| Total                    Current Assets                                                                            |   |   | 130,242 |   |   | 154,915 |   |   |
|                                                                                                               |   |   |  |   |   |  |   |   |
| **Regulatory                    Assets:**                                                                          |   |   |   |   |   |   |   |   |
| Gross                    Receipts and Franchise Taxes                                                              |   |   | 702 |   |   | 924 |   |   |
| Environmental                    Remediation Costs:                                                                |   |   |   |   |   |   |   |   |
| Expended                    - Net                                                                                  |   |   | 6,077 |   |   | 5,281 |   |   |
| Liability                    for Future Expenditures                                                               |   |   | 52,701 |   |   | 51,046 |   |   |
| Income                    Taxes - Flowthrough Depreciation                                                         |   |   | 6,152 |   |   | 6,641 |   |   |
| Deferred                    Postretirement Benefit Costs                                                           |   |   | 2,835 |   |   | 3,024 |   |   |
| Societal                    Benefit Costs                                                                          |   |   | 790 |   |   | 4,562 |   |   |
| Other                    Regulatory Assets                                                                         |   |   | 1,306 |   |   | 1,157 |   |   |
|                                                                                                               |   |   |  |   |   |  |   |   |
| Total                    Regulatory Assets                                                                         |   |   | 70,563 |   |   | 72,635 |   |   |
|                                                                                                               |   |   |  |   |   |  |   |   |
| **Other                    Noncurrent Assets:**                                                                    |   |   |   |   |   |   |   |   |
| Unamortized                    Debt Discount and Expense                                                           |   |   | 7,931 |   |   | 7,957 |   |   |
| Prepaid                    Pension                                                                                 |   |   | 23,558 |   |   | 24,812 |   |   |
| Accounts                    Receivable - Merchandise                                                               |   |   | 6,704 |   |   | 7,101 |   |   |
| Other                                                                                                              |   |   | 1,727 |   |   | 2,089 |   |   |
|                                                                                                               |   |   |  |   |   |  |   |   |
| Total                    Other Noncurrent Assets                                                                   |   |   | 39,920 |   |   | 41,959 |   |   |
|                                                                                                               |   |   |  |   |   |  |   |   |
| Total                    Assets                                                                                    |   | $ | 998,563 |   | $ | 1,007,586 |   |   |
|                                                                                                               |   |   |  |   |   |  |   |   |
| The                    accompanying footnotes are an integral part of the financial                    statements. |   |   |   |   |   |   |   |   |

----

|                                                                                                               |
|--------------------------------------------------------------------------------------------------------------------|
| **SOUTH                    JERSEY GAS COMPANY**                                                                    |
|                                                                                                               |   |   |   |   |   |   |   |   |
| **CONDENSED                    BALANCE SHEETS (UNAUDITED)**                                                        |
| (In                    Thousands)                                                                                  |
|                                                                                                               |   |   |   |   |   |   |   |   |
|                                                                                                                    |   |  June                    30, | December                    31, |   |
|                                                                                                               |   |   |                       2005 |   |   | 2004 |   |   |
|                                                                                                               |   |   |  |   |   |  |   |   |
| **Capitalization                    and Liabilities**                                                              |   |   |   |   |   |   |   |   |
|                                                                                                               |   |   |   |   |   |   |   |   |
| **Common                    Equity:**                                                                              |   |   |   |   |   |   |   |   |
| Common                    Stock, Par Value $2.50 per share:                                                        |   |   |   |   |   |   |   |   |
| Authorized                    - 4,000,000 shares                                                                   |   |   |   |   |   |   |   |   |
| Outstanding                    - 2,339,139 shares                                                                  |   | $ | 5,848 |   | $ | 5,848 |   |   |
| Other                    Paid-In Capital and Premium on Common Stock                                               |   |   | 170,317 |   |   | 170,317 |   |   |
| Accumulated                    Other Comprehensive Loss                                                            |   |   | (753 | ) |   | (112 | ) |   |
| Retained                    Earnings                                                                               |   |   | 145,363 |   |   | 130,695 |   |   |
|                                                                                                               |   |   |  |   |   |  |   |   |
| Total                    Common Equity                                                                             |   |   | 320,775 |   |   | 306,748 |   |   |
|                                                                                                               |   |   |  |   |   |  |   |   |
| **Preferred                    Stock:**                                                                            |   |   |   |   |   |   |   |   |
| Redeemable                    Cumulative Preferred 8% Series - Par Value $100                                      |   |   |   |   |   |   |   |   |
| per                    share; Authorized 41,966 shares; 0 and 16,904 shares outstanding                            |   |   |   |   |   |   |   |   |
| at                    June 30, 2005 and December 31, 2004, respectively                                            |   |   | - |   |   | 1,690 |   |   |
|                                                                                                               |   |   |  |   |   |  |   |   |
| **Long-Term                    Debt**                                                                              |   |   | 272,235 |   |   | 282,008 |   |   |
|                                                                                                               |   |   |  |   |   |  |   |   |
| Total                    Capitalization                                                                            |   |   | 593,010 |   |   | 590,446 |   |   |
|                                                                                                               |   |   |  |   |   |  |   |   |
| **Current                    Liabilities:**                                                                        |   |   |   |   |   |   |   |   |
| Notes                    Payable                                                                                   |   |   | 37,500 |   |   | 53,000 |   |   |
| Current                    Maturities of Long-Term Debt                                                            |   |   | 2,273 |   |   | 5,273 |   |   |
| Accounts                    Payable                                                                                |   |   | 54,779 |   |   | 59,026 |   |   |
| Derivatives                    - Energy Related Liabilities                                                        |   |   | 259 |   |   | 1,800 |   |   |
| Derivatives                    - Other                                                                             |   |   | 1,558 |   |   | 344 |   |   |
| Deferred                    Income Taxes - Net                                                                     |   |   | 4,734 |   |   | 2,627 |   |   |
| Customer                    Deposits                                                                               |   |   | 9,006 |   |   | 8,846 |   |   |
| Environmental                    Remediation Costs                                                                 |   |   | 18,792 |   |   | 13,531 |   |   |
| Taxes                    Accrued                                                                                   |   |   | 5,447 |   |   | 1,228 |   |   |
| Dividends                    Declared                                                                              |   |   | 5,626 |   |   | - |   |   |
| Interest                    Accrued and Other Current Liabilities                                                  |   |   | 10,582 |   |   | 12,386 |   |   |
|                                                                                                               |   |   |  |   |   |  |   |   |
| Total                    Current Liabilities                                                                       |   |   | 150,556 |   |   | 158,061 |   |   |
|                                                                                                               |   |   |  |   |   |  |   |   |
| **Deferred                    Credits and Other Noncurrent Liabilities:**                                          |   |   |   |   |   |   |   |   |
| Deferred                    Income Taxes - Net                                                                     |   |   | 140,949 |   |   | 138,208 |   |   |
| Environmental                    Remediation Costs                                                                 |   |   | 33,908 |   |   | 37,515 |   |   |
| Regulatory                    Liabilities                                                                          |   |   | 62,813 |   |   | 63,836 |   |   |
| Pension                    and Other Postretirement Benefits                                                       |   |   | 10,282 |   |   | 11,039 |   |   |
| Investment                    Tax Credits                                                                          |   |   | 2,962 |   |   | 3,129 |   |   |
| Other                                                                                                              |   |   | 4,083 |   |   | 5,352 |   |   |
|                                                                                                               |   |   |  |   |   |  |   |   |
| Total                    Deferred Credits and Other Noncurrent Liabilities                                         |   |   | 254,997 |   |   | 259,079 |   |   |
|                                                                                                               |   |   |  |   |   |  |   |   |
| Total                    Capitalization and Liabilities                                                            |   | $ | 998,563 |   | $ | 1,007,586 |   |   |
|                                                                                                               |   |   |  |   |   |  |   |   |
| The                    accompanying footnotes are an integral part of the financial                    statements. |   |   |   |   |   |   |   |   |
|                                                                                                               |   |   |   |   |   |   |   |   |

----

**Note      1.**
**Summary      of Significant Accounting Policies:**

**The      Entity**

**Equity      Investments**

**Estimates      and Assumptions**

**Regulation**

**Operating      Revenues**

----

**Accounts      Receivable and Provision for Uncollectible Accounts**

**Property,      Plant & Equipment**

**Depreciation      **

**Capitalized      Interest**

|                                 |   |   | June                30,2005 |   |   | June                30,2004 |   |
|---------------------------------|--------|--------|-----------------------------|--------|--------|-----------------------------|--------|
|                            |   |   |                        |   |   |                        |   |
| Quarter                ended    |   | $      | 253,000                     |   | $      | 172,800                     |   |
| Six                months ended |   |   | 542,500                     |   |   | 331,100                     |   |

----

**Impairment      of Long-Lived Assets**

**Derivative      Instruments**

----

**Asset      Retirement Costs**

**New      Accounting Pronouncements**

**Regulatory      Assets & Regulatory Liabilities**

----

|                                                   | Years                Remaining     |
|--------------------------------------------------------|------------------------------------|
|  Regulatory                Asset                  | As                of June 30, 2005 |
| Gross                Receipts and Franchise Taxes      | 2                                  |
| Environmental                Remediation Costs:        |                               |
| Expended                - Net                          | Various                            |
| Liability                for Future Expenditures       | Not                Applicable      |
| Income                Taxes - Flowthrough Depreciation | 6                                  |
| Deferred                Postretirement Benefit Costs   | 8                                  |
| Societal                Benefit Costs                  | Various                            |

|                                        |   | June                30, |   | December                31, |   |
|---------------------------------------------|--------|-------------------------|--------|-----------------------------|--------|
|                                        |   |                    | 2005   |                        |   | 2004 |   |
|                                        |   |                    |   |                        |   |   |   |
| Deferred                Gas Revenues - Net  |   | $                       | 10,377 |                        | $      | 12,334 |   |
| Excess                Plant Removal Costs   |   |                    | 47,652 |                        |   | 47,345 |   |
| Overcollected                State Taxes    |   |                    | 3,948  |                        |   | 3,871 |   |
| Other                                       |   |                    | 836    |                        |   | 286 |   |
| Total                Regulatory Liabilities |   | $                       | 62,813 |                        | $      | 63,836 |   |

**Cash      and Cash Equivalents**

----

**Reclassifications**

**Note      2.**
**Regulatory      Actions**

**Base      Rates - **

**Pending      Audits**

----

**Appliance      Service Business**

**Other      Regulatory Matters - **

----

**Note      3.**
**Related      Party Transactions:**

|   | · | South                Jersey Energy Company (SJE) - a third party energy marketer supplying                natural gas to customers within our                territory. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | South                Jersey Resources Group (SJRG) - a wholesale gas and risk management                business that supplies natural gas to retail marketers, utility businesses                and electricity generators in the mid-Atlantic and southern                regions. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Marina                Energy, LLC (Marina) - an owner and operator of production facilities                for                the commercial and industrial                markets. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | South                Jersey Energy Service Plus (SJESP) - an appliance service and installation                company. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|

----

|                                                    |   | Three                Months Ended                June 30, | Six                Months Ended                June 30, |
|----------------------------------------------------|--------|-----------------------------------------------------------|---------------------------------------------------------|
| *Sales                and Services Provided to:*   |   |                                                      | 2005                                                    |   |   | 2004 |   |   | 2005 |   |   | 2004 |   |
|                                               |   |                                                      |                                                    |   |   |   |   |   |   |   |   |   |   |
| SJI                                                |   | $                                                         | 172                                                     |   | $ | 207 |   | $ | 739 |   | $ | 420 |   |
| SJE                                                |   |                                                      | 194                                                     |   |   | 3,568 |   |   | 396 |   |   | 4,964 |   |
| SJRG                                               |   |                                                      | 1,303                                                   |   |   | 560 |   |   | 3,622 |   |   | 4,184 |   |
| Marina                                             |   |                                                      | 54                                                      |   |   | 59 |   |   | 151 |   |   | 107 |   |
| SJESP                                              |   |                                                      | 109                                                     |   |   | - |   |   | 225 |   |   | - |   |
|                                               |   |                                                      |                                                    |   |   |   |   |   |   |   |   |   |   |
|                                               |   |                                                      |                                                    |   |   |   |   |   |   |   |   |   |   |
| *Sales                and Services Received from:* |   |                                                      |                                                    |   |   |   |   |   |   |
| SJRG                                               |   | $                                                         | 1,101                                                   |   | $ | 9,984 |   | $ | 2,727 |   | $ | 10,140 |   |
| SJI                                                |   |                                                      | 2,527                                                   |   |   | 1,957 |   |   | 3,428 |   |   | 2,983 |   |
|                                               |   |                                                      |                                                    |   |   |   |   |   |   |   |   |   |   |
|                                               |   |                                                      |                                                    |   |   |   |   |   |   |   |   |   |   |
|                                               |   |                                                      |                                                    |   |   |   |   |   |   |   |   |   |   |
|                                               |   |                                                      | As                of June                30,            |   |   | As                of December                31, |   |   |   |   |   |   |   |
| *Amounts                due to:*                   |   |                                                      | 2005                                                    |   |   | 2004 |   |   |   |   |   |   |   |
| SJI                                                |   | $                                                         | 307                                                     |   | $ | 741 |   |   |   |   |   |   |   |
| SJE                                                |   |                                                      | 3,288                                                   |   |   | 622 |   |   |   |   |   |   |   |
| SJRG                                               |   |                                                      | 17                                                      |   |   | 0 |   |   |   |   |   |   |   |
| SJESP                                              |   |                                                      | 1,033                                                   |   |   | 1,808 |   |   |   |   |   |   |   |
|                                               |   |                                                      |                                                    |   |   |   |   |   |   |   |   |   |   |
| *Amounts                due from:*                 |   |                                                      |                                                    |   |   |   |   |   |   |   |   |   |   |
| SJI                                                |   |                                                      | 61                                                      |   |   | 49 |   |   |   |   |   |   |   |
| SJE                                                |   |                                                      | 65                                                      |   |   | 79 |   |   |   |   |   |   |   |
| SJRG                                               |   |                                                      | 117                                                     |   |   | 6 |   |   |   |   |   |   |   |
| Marina                                             |   |                                                      | 14                                                      |   |   | 24 |   |   |   |   |   |   |   |
| SJESP                                              |   |                                                      | 64                                                      |   |   | 83 |   |   |   |   |   |   |   |
|                                               |   |                                                      |                                                    |   |   |   |   |   |   |   |   |   |   |

----

|                                     | Three                MonthsEnded                June 30, |   | Six                MonthsEnded                June 30, |
|------------------------------------------|----------------------------------------------------------|--------|--------------------------------------------------------|
|                                     | 2005                                                     |   | 2004                                                   |   | 2005 |   | 2004 |
| Meter                Reading Service     | 668                                                      |   | 656                                                    |   | 1,296 |   | 1,288 |
|                                     |                                                     |   |                                                   |   |   |   |   |
|                                     | As                ofJune                30,              |   | As                ofDecember                31,        |   |   |   |   |
|                                     | 2005                                                     |   | 2004                                                   |   |   |   |   |
| Amounts                due to Millennium | 225                                                      |   | 440                                                    |   |   |   |   |

**Note      4.**
**Long-Term      Debt:**

**Note      5.**
**Preferred      Stock:**

**Note      6.**
**Retained      Earnings**

----

**Note      7.**
**Pensions      & Other Postretirement Benefit Plans**

|                                                 |   |                                         |                            | Pension                Benefits |   |   |   |
|------------------------------------------------------|--------|----------------------------------------------|---------------------------------|---------------------------------|--------|--------|--------|
|                                                 |   | Three                Months Ended            |                            | Six                Months Ended |   |
|                                                      |   | June                30,                      | June                30,         |
|                                                 |   |                                         | 2005                            |                            |   | 2004   |   |   | 2005 |   |   | 2004 |   |
|                                                 |   |                                         |                            |                            |   |   |   |   |   |   |   |   |   |
| Service                Cost                          |   | $                                            | 497                             |                            | $      | 672    |   | $ | 1,377 |   | $ | 1,344 |   |
| Interest                Cost                         |   |                                         | 943                             |                            |   | 1,274  |   |   | 2,664 |   |   | 2,548 |   |
| Expected                Return on Plan Assets        |   |                                         | (1,323                          | )                               |   | (1,580 | )      |   | (3,739 | ) |   | (3,160 | ) |
| Amortization                of Loss and Other        |   |                                         | 332                             |                            |   | 388    |   |   | 952 |   |   | 776 |   |
| Net                Periodic Benefit Cost             |   |                                         | 449                             |                            |   | 754    |   |   | 1,254 |   |   | 1,508 |   |
| Capitalized                Benefit Costs             |   |                                         | (157                            | )                               |   | (226   | )      |   | (439 | ) |   | (452 | ) |
| Net                Periodic Benefit Expense          |   | $                                            | 292                             |                            | $      | 528    |   | $ | 815 |   | $ | 1,056 |   |
|                                                 |   |                                         |                            |                            |   |   |   |   |   |   |   |   |   |
|                                                 |   |                                         |
|                                                 |   | Other                Postretirement Benefits |
|                                                      |   | Three                Months Ended            | Six                Months Ended |
|                                                      |   | June                30,                      | June                30,         |
|                                                 |   |                                         | 2005                            |                            |   | 2004   |   |   | 2005 |   |   | 2004 |   |
|                                                 |   |                                         |                            |                            |   |   |   |   |   |   |   |   |   |
| Service                Cost                          |   | $                                            | 19                              |                            | $      | 341    |   | $ | 366 |   | $ | 682 |   |
| Interest                Cost                         |   |                                         | 385                             |                            |   | 603    |   |   | 982 |   |   | 1,206 |   |
| Expected                Return on Plan Assets        |   |                                         | (394                            | )                               |   | (351   | )      |   | (741 | ) |   | (702 | ) |
| Amortization                of Transition Obligation |   |                                         | -                               |                            |   | 189    |   |   | - |   |   | 378 |   |
| Amortization                of Loss and Other        |   |                                         | 71                              |                            |   | 37     |   |   | 104 |   |   | 74 |   |
| Net                Periodic Benefit Cost             |   |                                         | 81                              |                            |   | 819    |   |   | 711 |   |   | 1,638 |   |
| Capitalized                Benefit Costs             |   |                                         | (28                             | )                               |   | (246   | )      |   | (249 | ) |   | (491 | ) |
| Net                Periodic Benefit Expense          |   | $                                            | 53                              |                            | $      | 573    |   | $ | 462 |   | $ | 1,147 |   |

----

**Future      Benefit Payments**

|            |   |                            |   | Other                                  |   |
|-----------------|--------|---------------------------------|--------|----------------------------------------|--------|
|            |   | Pension                Benefits |   | Postretirement                Benefits |   |
|            |   |                            |   |                                   |   |   |   |
| 2005            |   | $                               | 3,823  |                                   | $      | 1,461 |   |
| 2006            |   |                            | 3,987  |                                   |   | 1,651 |   |
| 2007            |   |                            | 4,189  |                                   |   | 1,854 |   |
| 2008            |   |                            | 4,420  |                                   |   | 2,036 |   |
| 2009            |   |                            | 4,694  |                                   |   | 2,207 |   |
| 2010-2014  |   |                            | 29,188 |                                   |   | 12,606 |   |

**Contributions**

**Note      8.**
**Commitments      and Contingencies**

**Contractual      Cash Obligations - **

|                                                 |   |   |    | Up                to  |   | 2                -                3 |   | 4                -                5 |    | More                than |   |
|------------------------------------------------------|--------|--------|---------|-----------------------|--------|-------------------------------------|--------|-------------------------------------|---------|--------------------------|--------|
| Contractual                Obligations               |   | Total  |    | 1                Year |   | Years                               |   | Years                               |    | 5                Years   |   |
|                                                 |   |   |    |                  |   |                                |   |                                |    |                     |   |   |   |   |   |   |
| Long-Term                Debt                        |   | $      | 274,508 |                  | $      | 2,273                               |   | $                                   | 2,270   |                     | $      | - |   | $ | 269,965 |   |
| Interest                on Long-Term Debt            |   |   | 237,786 |                  |   | 16,761                              |   |                                | 32,966  |                     |   | 32,777 |   |   | 155,282 |   |
| Operating                Leases                      |   |   | 486     |                  |   | 180                                 |   |                                | 248     |                     |   | 42 |   |   | 16 |   |
| Construction                Obligations              |   |   | 5,526   |                  |   | 5,462                               |   |                                | 64      |                     |   | - |   |   | - |   |
| Commodity                Supply Purchase Obligations |   |   | 263,427 |                  |   | 22,618                              |   |                                | 87,119  |                     |   | 70,600 |   |   | 83,090 |   |
| New                Jersey Clean Energy               |   |   |    |                  |   |                                |   |                                |    |                     |   |   |   |   |   |   |
| Program                (Note 2)                      |   |   | 22,141  |                  |   | 4,341                               |   |                                | 13,800  |                     |   | 4,000 |   |   | - |   |
| Other                Purchase Obligations            |   |   | 5,505   |                  |   | 2,355                               |   |                                | 1,800   |                     |   | 1,350 |   |   | - |   |
|                                                 |   |   |    |                  |   |                                |   |                                |    |                     |   |   |   |   |   |   |
| Total                Contractual Cash Obligations    |   | $      | 809,379 |                  | $      | 53,990                              |   | $                                   | 138,267 |                     | $      | 108,769 |   | $ | 508,353 |   |

----

**Construction      and Environmental Commitments**

**Gas      Supply Contracts**

**Pending      Litigation**

**Environmental      Remediation Costs**

----

**Note      9.**
**Subsequent      Events:**

----

**Item      2. Management’s Discussion and Analysis of Financial**

**Condition      and Results of Operations (Unaudited)**

**Overview**

|   | · | sells                natural gas and pipeline transportation capacity (off-system sales)                on a                wholesale basis to various customers on the interstate pipeline system; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | transports                natural gas purchased directly from producers or suppliers for its                own                sales and for some of its customers; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | serviced                appliances via the sale of appliance service programs, as well as                on a                time and materials basis through September 1, 2004, at which time                the                business line was transferred out of SJG and into an affiliate by                common                ownership, South Jersey Energy Service Plus,                LLC. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Forward-Looking      Statement and Risk Factors**

----

**Critical      Accounting Policies**

**Estimates      and Assumptions - **

**New      Accounting Pronouncements - **

**Temperature      Adjustment Clause **

**Recent      Regulatory Actions**
** **

**Environmental      Remediation **
** **

----

**Customer      Choice**

**Results      of Operations**

**Operating      Revenues**

----

|                                                    |   | Three                  Months Ended |   | Six                  Months Ended |   |
|---------------------------------------------------------|--------|-------------------------------------|--------|-----------------------------------|--------|
|                                                    |   | June                  30,           |   | June                  30,         |   |
|                                                    |   |                                | 2005   |                              |   | 2004 |   |   | 2005 |   |   | 2004 |   |
| Operating                  Revenues (thousands):        |   |                                |   |                              |   |   |   |   |   |   |   |   |   |
| Firm                                                    |   |                                |   |                              |   |   |   |   |   |   |   |   |   |
| Residential                                             |   | $                                   | 29,943 |                              | $      | 17,967 |   | $ | 127,114 |   | $ | 99,108 |   |
| Commercial                                              |   |                                | 10,234 |                              |   | 5,014 |   |   | 45,438 |   |   | 28,980 |   |
| Industrial                                              |   |                                | 566    |                              |   | 715 |   |   | 2,144 |   |   | 3,032 |   |
| Cogeneration                  & Electric Generation |   |                                | 3,813  |                              |   | 2,004 |   |   | 5,139 |   |   | 2,423 |   |
| Firm                  Transportation                    |   |                                | 11,259 |                              |   | 13,540 |   |   | 36,016 |   |   | 46,409 |   |
|                                                    |   |                                |   |                              |   |   |   |   |   |   |   |   |   |
| Total                  Firm Operating Revenues          |   |                                | 55,815 |                              |   | 39,240 |   |   | 215,851 |   |   | 179,952 |   |

| Interruptible                                   |   |   | 424    |   |   | 469    |   |   | 839     |   |   | 757     |   |
|-------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|--------|---------|--------|
| Interruptible                  Transportation   |   |   | 516    |   |   | 269    |   |   | 1,115   |   |   | 564     |   |
| Off-System                                      |   |   | 26,334 |   |   | 31,024 |   |   | 75,239  |   |   | 86,376  |   |
| Capacity                  Release & Storage |   |   | 2,414  |   |   | 1,937  |   |   | 6,606   |   |   | 4,664   |   |
| Appliance                  Service              |   |   | -      |   |   | 2,773  |   |   | -       |   |   | 4,909   |   |
| Other                                           |   |   | 580    |   |   | 258    |   |   | 970     |   |   | 1,008   |   |
|                                            |   |   |   |   |   |   |   |   |    |   |   |    |   |
| Total                  Operating Revenues       |   | $      | 86,083 |   | $      | 75,970 |   | $      | 300,620 |   | $      | 278,230 |   |

----

|                                                  |   |   |   |   |   |   |   |   |   |
|-------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Throughput                (MMcf):                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Firm                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential                                           |   |   | 2,287  |   |   | 1,801  |   |   | 10,591 |   |   | 9,289 |   |
| Commercial                                            |   |   | 907    |   |   | 587    |   |   | 4,260  |   |   | 3,018 |   |
| Industrial                                            |   |   | 26     |   |   | 24     |   |   | 126    |   |   | 116 |   |
| Cogeneration                & Electric Generation |   |   | 422    |   |   | 218    |   |   | 487    |   |   | 243 |   |
| Firm                Transportation                    |   |   | 5,920  |   |   | 6,562  |   |   | 16,153 |   |   | 18,774 |   |
|                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                Firm Throughput                  |   |   | 9,562  |   |   | 9,192  |   |   | 31,617 |   |   | 31,440 |   |
|                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interruptible                                         |   |   | 41     |   |   | 54     |   |   | 79     |   |   | 88 |   |
| Interruptible                Transportation           |   |   | 741    |   |   | 589    |   |   | 1,596  |   |   | 1,165 |   |
| Off-System                                            |   |   | 3,467  |   |   | 4,789  |   |   | 10,130 |   |   | 12,622 |   |
| Capacity                Release & Storage         |   |   | 21,150 |   |   | 13,533 |   |   | 38,504 |   |   | 25,195 |   |
|                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                Throughput                       |   |   | 34,961 |   |   | 28,157 |   |   | 81,926 |   |   | 70,510 |   |

**Cost      of Sales**

**Operating      Expenses**

|                                  |   | Three                MonthsEnded                June 30, |                         | Six                Months Ended June 30, |   |
|---------------------------------------|--------|----------------------------------------------------------|------------------------------|------------------------------------------|--------|
|                                       |   |                                                     | 2005                vs. 2004 |                                     |   | 2005                vs. 2004 |   |
|                                  |   |                                                     |                         |                                     |   |   |   |
| Operations                            |   | $                                                        | (1,231                       | )                                        | $      | 272 |   |
| Maintenance                           |   |                                                     | 72                           |                                     |   | 220 |   |
| Depreciation                          |   |                                                     | (866                         | )                                        |   | (1,671 | ) |
| Energy                and Other Taxes |   |                                                     | (31                          | )                                        |   | 135 |   |

----

**Other      Income and Expense **

**Interest      Charges **

----

**Income      Taxes - **

**Net      Income **

**Liquidity      and Capital Resources **

----

|                           |   | June                30, |   | December                31, |   |
|--------------------------------|--------|-------------------------|--------|-----------------------------|--------|
|                           |   |                    | 2005   |                        |   | 2004 |   |
|                           |   |                    |   |                        |   |   |   |
| Common                Equity   |   |                    | 51%    |                        |   | 48% |   |
| Long-Term                Debt  |   |                    | 43%    |                             |   | 44% |   |
| Short-Term                Debt |   |                    | 6%     |                        |   | 8% |   |
|                           |   |                    |   |                        |   |   |   |
| Total                          |   |                    | 100%   |                        |   | 100% |   |

----

**Capital      Expenditures, Commitments and Contingencies **

**Capital      Expenditures **

**Commitments      and Contingencies **

|                                                 |   |   |    | Up                to  |   | 2                -                3 |   | 4                -                5 |    | More                than |   |
|------------------------------------------------------|--------|--------|---------|-----------------------|--------|-------------------------------------|--------|-------------------------------------|---------|--------------------------|--------|
| Contractual                Obligations               |   | Total  |    | 1                Year |   | Years                               |   | Years                               |    | 5                Years   |   |
|                                                 |   |   |    |                  |   |                                |   |                                |    |                     |   |   |   |   |   |   |
| Long-Term                Debt                        |   | $      | 274,508 |                  | $      | 2,273                               |   | $                                   | 2,270   |                     | $      | - |   | $ | 269,965 |   |
| Interest                on Long-Term Debt            |   |   | 237,786 |                  |   | 16,761                              |   |                                | 32,966  |                     |   | 32,777 |   |   | 155,282 |   |
| Operating                Leases                      |   |   | 486     |                  |   | 180                                 |   |                                | 248     |                     |   | 42 |   |   | 16 |   |
| Construction                Obligations              |   |   | 5,526   |                  |   | 5,462                               |   |                                | 64      |                     |   | - |   |   | - |   |
| Commodity                Supply Purchase Obligations |   |   | 263,427 |                  |   | 22,618                              |   |                                | 87,119  |                     |   | 70,600 |   |   | 83,090 |   |
| New                Jersey Clean Energy               |   |   |    |                  |   |                                |   |                                |    |                     |   |   |   |   |   |   |
| Program                (Note 2)                      |   |   | 22,141  |                  |   | 4,341                               |   |                                | 13,800  |                     |   | 4,000 |   |   | - |   |
| Other                Purchase Obligations            |   |   | 5,505   |                  |   | 2,355                               |   |                                | 1,800   |                     |   | 1,350 |   |   | - |   |
|                                                 |   |   |    |                  |   |                                |   |                                |    |                     |   |   |   |   |   |   |
| Total                Contractual Cash Obligations    |   | $      | 809,379 |                  | $      | 53,990                              |   | $                                   | 138,267 |                     | $      | 108,769 |   | $ | 508,353 |   |

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**            Off-Balance Sheet Arrangements **

**Pending      Litigation **

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**Item      3. Quantitative and Qualitative Disclosures About**

**Market      Risks of the Company (Unaudited)**

**Market      Risks**

**Commodity      Market Risks **

| Assets                         |   | $      | 2,717 |   |
|--------------------------------|--------|--------|-------|--------|
| Liabilities                    |   |   | 259   |   |
| Net                Derivatives |   | $      | 2,458 |   |

| Net                Derivatives — Energy Related Liability, January 1, 2005                 |   | $      | (528  | )      |
|--------------------------------------------------------------------------------------------------|--------|--------|-------|--------|
| Contracts                Settled During Six Months Ended June 30, 2005                           |   |   | (499  | )      |
| Other                Changes in Fair Value from Continuing and New Contracts,                Net |   |   | 3,485 |   |
| Net                Derivatives — Energy Related Asset, June 30, 2005                       |   | $      | 2,458 |   |

**Interest      Rate Risk **

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**Ratio      of Earnings to Fixed Charges**

| Twelve                Months |   |                                   |   |   |   |   |
|------------------------------|--------|----------------------------------------|--------|--------|--------|--------|
| Ended                        |   |                                   |   |   |   |   |
| June                30,      |   | Year                Ended December 31, |
| 2005                         |   | 2004                                   | 2003   | 2002   | 2001   | 2000   |
| 4.2x                         |   | 3.9x                                   | 3.3x   | 2.9x   | 2.6x   | 2.6x   |

**Item      4. Controls and Procedures**

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| (a)                Exhibits |                                                                                                                                                                                                                                                                                                                                          |
|-----------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                        |                                                                                                                                                                                                                                                                                                                                          |
| Exhibit                No.  | Description                                                                                                                                                                                                                                                                                                                                   |
|                        |                                                                                                                                                                                                                                                                                                                                          |
| 31.1                        | Certification                of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Exchange                Act.                                                                                                                                                                                                                        |
|                        |                                                                                                                                                                                                                                                                                                                                          |
| 31.2                        | Certification                of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Exchange                Act.                                                                                                                                                                                                                        |
|                        |                                                                                                                                                                                                                                                                                                                                          |
| 32.1                        | Certification                of Chief Executive Officer Pursuant to Rule 13a-14(b) of the Exchange                Act                as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18,                United                States Code). |
|                        |                                                                                                                                                                                                                                                                                                                                          |
| 32.2                        | Certification                of Chief Financial Officer Pursuant to Rule 13a-14(b) of the Exchange                Act                as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18,                United                States Code). |

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| Dated:                August 9, 2005 | By:                /s/                Edward J. Graham                |
|--------------------------------------|-----------------------------------------------------------------------|
|                                 | Edward                J. Graham                                       |
|                                 | Chairman,                President & Chief Executive Officer      |
|                                 |                                                                  |
|                                 |                                                                  |
| Dated:                August 9, 2005 | By:                /s/                David A. Kindlick               |
|                                 | David                A. Kindlick                                      |
|                                 | Executive                Vice President & Chief Financial Officer |

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