<PAGE>

Date: September 20, 1995                                      Contract No. 24350

                                                                   Exhibit 10(a)

                            FTS - 1 SERVICE AGREEMENT

This AGREEMENT is entered into by ANR Pipeline Company

(Transporter) and The Peoples Gas Light and Coke Company (Shipper)

WHEREAS, Shipper has requested Transporter to transport Gas on its behalf and
Transporter represents that it is willing to transport Gas under the terms and
conditions of this Agreement.

NOW, THEREFORE, Transporter and Shipper agree that the terms below, together
with the terms and conditions of Transporter's applicable Rate Schedule and
General Terms and Conditions of Transporter's FERC Gas Tariff constitute the
transportation service to be provided and the rights and obligations of Shipper
and Transporter.

1.        AUTHORITY FOR TRANSPORTATION SERVICE:

          284G - Blanket

2.        RATE SCHEDULE:  FIRM TRANSPORTATION SERVICE (FTS - 1)

3.        CONTRACT QUANTITIES:

          Primary Routes - see Exhibit attached hereto.

          Such Contract Quantities shall be reduced for scheduling purposes, but
          not for billing purposes, by the Contract Quantities that Shipper has
          released through Transporter's capacity release program for the period
          of any release.

4.        TERM OF AGREEMENT:

          11/01/1995 to

          10/31/2000

5.         RATES:

          Maximum rates, charges, and fees shall be applicable for the
          entitlements and quantities delivered pursuant to this Agreement
          unless Transporter has advised Shipper in writing or by ANR Xpedite
          that it has agreed otherwise.

          It is further agreed that Transporter may seek authorization from the
          Commission and/or other appropriate body at any time and from time to
          time to change any rates, charges or other provisions in the
          applicable Rate Schedule and General Terms and

<PAGE>
Date: September 20, 1995                                      Contract No. 24350

          Conditions of Transporter's FERC Gas Tariff, and Transporter shall
          have the right to place such changes in effect in accordance with the
          Natural Gas Act. This Agreement shall be deemed to include such
          changes and any changes which become effective by operation of law and
          Commission order.  Nothing contained herein shall be construed to deny
          Shipper any rights it may have under the Natural Gas Act, including
          the right to participate fully in rate or other proceedings by
          intervention or otherwise to contest increased rates in whole or in
          part.


6.        INCORPORATION BY REFERENCE

          The provisions of Transporter's applicable Rate Schedule and the
          General Terms and Conditions of Transporter's FERC Gas Tariff are
          specifically incorporated herein by reference and made a part hereof.

7.        NOTICES:

          All notices can be given by telephone or other electronic means,
          however, such notice shall be confirmed in writing at the addresses
          below or through ANR Xpedite. Shipper or Transporter may change the
          addresses below by written notice to the other without the necessity
          of amending this agreement:

          TRANSPORTER:

          ANR PIPELINE COMPANY
          500 Renaissance Center
          Detroit, Michigan 48243
          Attentions:    Gas Control (Nominations)
                         Volume Management (Statements)
                         Cash Control (Payments)
                         Marketing Administration (All Other Matters)

          SHIPPER:


          THE PEOPLES GAS LIGHT AND COKE CO.   (Shipper Name)
          ----------------------------------
          130 East Randolph, 22nd Floor        (Address)
          ----------------------------------
          Chicago, IL 60601-6207               (City, State, Zip)
          ----------------------------------
          Attention:     Eckhard Blaumueller
                         -------------------
          Telephone:     (312)  240-7057
                         -------------------
          Fax:           (312)  240-4211
                         -------------------


                                        2
<PAGE>
Date: September 20, 1995                                      Contract No. 24350

          INVOICES AND STATEMENTS:

          THE PEOPLES GAS LIGHT AND COKE CO.   (Shipper Name)
          -----------------------------------
          130 East Randolph, 22nd Floor        (Address)
          -----------------------------------
          Chicago, IL 60601-6207               (City, State, Zip)
          -----------------------------------
          Attention:     Eckhard Blaumueller
                         --------------------
          Telephone:     (312)  240-7057
                         --------------------
          Fax:           (312)  240-4211
                         --------------------

          NOMINATIONS:


          THE PEOPLES GAS LIGHT AND COKE CO.  (Shipper Name)
          ----------------------------------
          130 East Randolph, 22nd Floor       (Address)
          ----------------------------------
          Chicago, IL 60601-6207              (City, State, Zip)
          ----------------------------------
          Attention:     Eckhard Blaumueller
                         -------------------
          Telephone:     (312)  240-7057
                         -------------------
          Fax:           (312)  240-4211
                         -------------------

          Mechanical Dialing
          Device No(s)
                      ----------------------


          ALL OTHER MATTERS:


          THE PEOPLES GAS LIGHT AND COKE CO.  (Shipper Name)
          ----------------------------------
          130 East Randolph, 22nd Floor       (Address)
          ----------------------------------
          Chicago, IL 60601-6207              (City, State, Zip)
          ----------------------------------
          Attention:     Eckhard Blaumueller
                         -------------------
          Telephone:     (312)  240-7057
                         -------------------
          Fax:           (312)  240-4211
                         -------------------

8.        FURTHER AGREEMENT

          A.        The rate for all quantities of gas transported on the
                    Primary Route(s) up to the Primary Route MDQ(s) under this
                    Agreement shall be the current FERC Tariff Rates in effect
                    not to exceed $0.15 per dth on a 100% load factor basis
                    inclusive of Volumetric Buyout/Buydown, GRI, Dakota and
                    Transition Costs. In



                                        3

<PAGE>
Date: September 20, 1995                                      Contract No. 24350

                    addition, Shipper will be charged ACA, fuel and any other
                    related fees or surcharges.

          B.        All quantities associated with Secondary Receipt Points,
                    Secondary Delivery Points, Secondary Routes and the releases
                    of the capacity under this Agreement will be at Maximum
                    Tariff Rates plus all other related fees, surcharges and
                    fuel.

          C.        Shipper and any Agent of Shipper agree that the rates stated
                    herein shall be confidential and shall be maintained
                    confidentially by Shipper and any Agent of Shipper. Shipper
                    may disclose such rates only if such disclosure is required
                    by law and Shipper requests confidential or privileged
                    treatment under applicable statutes, rules and regulations,
                    and provides reasonable notice to Transporter prior to such
                    disclosure. Any unauthorized disclosure of the rates stated
                    herein shall have the effect of terminating from the date
                    the discounted rate is disclosed any rate discounts
                    reflected herein such that, for the remaining term of this
                    Agreement, Shipper shall be required to pay Transporter the
                    maximum applicable rate for service, as well as all other
                    charges, surcharges or direct bill applicable to such
                    service.

          D.        Shipper waives its right to segment its FTS-1 capacity
                    during the term of this Agreement.

          E.        If the FTS-1 Agreement (No. 24400) between Transporter and
                    Shipper is terminated after one (1) year of service, this
                    Agreement shall be amended to change the Primary Delivery
                    Point to East Joliet only with a 100% load factor rate of
                    $0.12 per dth inclusive of Volumetric Buyout/Buydown, GRI,
                    Dakota and Transition Costs. In addition, Shipper will be
                    charged ACA, fuel and any other related fees or surcharges.

          F.        During the November 1, 1995 to April 30, 1996, October
                    through April (1996 - 2000) and October 1-31, 2000 periods,
                    Shipper can nominate up to 60,000 dth/day from Crystal Falls
                    to either Maumee East/Col Gas OH or East Joliet as long as
                    the total combined nomination does not exceed 60,000
                    dth/day.

          G.        Consistent with provisions of its Tariff, Transporter is
                    willing to contract on Shipper's behalf for capacity
                    required on third party transporters, or for other services
                    to effectuate Shipper's receipt of gas on third party
                    facilities and delivery of gas to Transporter's facilities.

                    Shipper must advise Transporter prior to commencement of
                    such third party transportation of its desire to have
                    Transporter act in such a capacity.

                    Shipper agrees to pay all charges related to such third
                    party transportation arrangements pursuant to Transporter's
                    Tariff.



                                        4

<PAGE>
Date: September 20, 1995                                      Contract No. 24350

          H.        To the extent Shipper desires to utilize receipt/delivery
                    points pursuant to Part 284 B (Section 311 of the NGPA and
                    Section 284.102 of the Commission's regulations), Shipper
                    must execute a separate agreement with Transporter and
                    Shipper must also certify that the transportation of gas
                    will be on behalf of either an "intrastate pipeline" or a
                    "local distribution company."

9.        OPERATIONAL FLOW ORDERS

          Shipper hereby guarantees to Transporter that each contract it has
          entered into in connection with the Gas to be transported under this
          Agreement contains a provision that permits Transporter to issue an
          effective Operational Flow Order pursuant to Section 8 of the General
          Terms and Conditions. Shipper shall also guarantee for any supply
          contract for Gas that is transported via Viking Gas Transmission
          Company, that Transporter shall be designated a third party
          beneficiary.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
by their respective Officers or Representatives thereunto duly authorized to be
effective as of the date stated above.

SHIPPER:  The Peoples Gas Light and     TRANSPORTER:  ANR Pipeline Company
          Coke Company

By:        /s/ T. M. Patrick            By:    /s/ Linda M. Maiorana
           --------------------                ----------------------------
Title:     Vice President               Title: Assistant Vice President
           --------------------                ----------------------------
Date:      10/04/95                     Date: 10/05/95
           --------------------                ----------------------------



                                        5


<PAGE>

<TABLE>
    <S>                                                    <C>                   <C>
    PRIMARY ROUTE EXHIBIT                                  Contract No.          24350
    To Agreement Between                                   Contract Rate         FTS-1
    ANR Pipeline Company (Transporter)                     Contract Date         September 20, 1995
    and The Peoples Gas Light and Coke Company (Shipper)   Amendment Date  -

</TABLE>

<TABLE>
<CAPTION>

  RECEIPT          RECEIPT              DELIVERY              DELIVERY             MDQ
  NUMBER            NAME                 NUMBER                 NAME               (DTH)       EFFECTIVE PERIOD
---------  -------------------------   ----------     ---------------------------  ------   ------------------------

<S>        <C>                         <C>            <C>                          <C>       <C>
037000700  Crystal Falls/Fortune Lk    037044750      Maumee East/Col Gas OH (1)   60000     11/01/95 to 04/30/96
                                       032200100      East Joliet

037000700  Crystal Falls/Fortune Lk    032200100      East Joliet                  60000       MAY - SEPTEMBER
                                                                                                 (1996 - 2000)

037000700  Crystal Falls/Fortune Lk    037044750      Maumee East/Col Gas OH (1)   60000       OCTOBER - APRIL
                                       032200100      East Joliet                                (1996 - 2000)

037000700  Crystal Falls/Fortune Lk    037044750      Maumee East/Col Gas OH (1)   60000   10/01/2000 to 10/31/2000
                                       032200100      East Joliet

</TABLE>


(1) The Primary Delivery Point of Maumee East/Col Gas OH can be used during the
    months of October through April only; the Primary Delivery Point of East
    Joliet can be used through the term of the Agreement.