***EXHIBIT      10(c)***

***Execution      Draft***

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|  **SEASONAL                CREDIT AGREEMENT** **DATED                AS OF** **October                20, 2006**  **BETWEEN**  **PEOPLES                ENERGY CORPORATION,** **and** **BANK                OF AMERICA, N.A.****as                Lender.**  |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**TABLE        OF CONTENTS**

| SECTION                  1. DEFINITIONS;                  INTERPRETATION. | 1                                          |
|--------------------------------------------------------------------------------|--------------------------------------------|
|                                                                           |  *Section                  1.1 * | *Definitions* | 1 |
|                                                                           |  *Section                  1.2*       | *Interpretation* | 7 |

|  SECTION                  2. THE                  REVOLVING CREDIT. | 7                               |
|-------------------------------------------------------------------------------|---------------------------------|
|                                                                          | *Section                  2.1*  | *The                  Loan Commitment* | 7 |
|                                                                          | *Section                  2.2*  | *[Reserved]* | 7 |
|                                                                          | *Section                  2.3*  | *Applicable                  Interest Rates* | 7 |
|                                                                          | *Section                  2.5*  | *Minimum                  Borrowing Amounts* | 9 |
|                                                                          | *Section                  2.6*  | *Manner                  of Borrowing Loans and Designating Interest Rates Applicable to                  Loans* | 9 |
|                                                                          | *Section                  2.8*  | *Interest                  Periods* | 10 |
|                                                                          | *Section                  2.9*  | *Maturity                  of Loans* | 11 |
|                                                                          | *Section                  2.10* | *Prepayments* | 11 |
|                                                                          | *Section                  2.12* | *Default                  Rate* | 11 |
|                                                                          | *Section                  2.13* | *Evidence                  of Debt* | 12 |
|                                                                          | *Section                  2.14* | *Funding                  Indemnity* | 12 |
|                                                                          | *Section                  2.15* | *Revolving                  Credit Commitment Terminations* | 13 |
|                                                                          | *Section                  2.16* | *Regulation                  D Compensation* | 13 |
|                                                                          | *Section                  2.17* | *Arbitrage                  Compensation* | 13 |

| SECTION                  3. FEES. | 13                        |
|----------------------------------------|--------------------------------|
|                                   | *Section                  3.1* | *Fees*. | 13 |

| SECTION                  4. PLACE                  AND APPLICATION OF PAYMENTS. | 14                        |
|--------------------------------------------------------------------------------------|--------------------------------|
|                                                                                 | *Section                  4.1* | *Place                  and Application of Payments* | 14 |

| SECTION                  5. REPRESENTATIONS                  AND WARRANTIES. | 14                        |
|-----------------------------------------------------------------------------------|--------------------------------|
|                                                                              | *Section                  5.1* | *Corporate                  Organization and Authority* | 15 |
|                                                                              | *Section                  5.2* | *Corporate                  Authority and Validity of Obligations* | 15 |
|                                                                              | *Section                  5.3* | *Financial                  Statements* | 15 |
|                                                                              | *Section                  5.4* | *Approvals* | 15 |
|                                                                              | *Section                  5.5* | *ERISA* | 15 |
|                                                                              | *Section                  5.6* | *Government                  Regulation* | 16 |
|                                                                              | *Section                  5.7* | *Margin                  Stock; Proceeds* | 16 |
|                                                                              | *Section                  5.8* | *Full                  Disclosure* | 16 |

| SECTION                  6. CONDITIONS                  PRECEDENT. | 16                        |
|-------------------------------------------------------------------------|--------------------------------|
|                                                                    | *Section                  6.1* | *Initial                  Credit Event* | 16  |
|                                                                    | *Section                  6.2* | *All                  Credit Events* | 17  |

| SECTION                  7. COVENANTS. | 17                        |
|---------------------------------------------|--------------------------------|
|                                        | *Section                  7.1* | *Corporate                  Existence* | 17  |
|                                        | *Section                  7.2* | *ERISA* | 18  |
|                                        | *Section                  7.3* | *Financial                  Reports and Other Information* | 18  |

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|   | *Section                  7.5* | *Regulation                  U; Proceeds*     | 19  |
|--------|--------------------------------|-----------------------------------------------|----------|
|   | *Section                  7.6* | *Sales                  of Assets*            | 19  |
|   | *Section                  7.7* | *Capital                  Ratio*              | 19  |
|   | *Section                  7.8* | *Compliance                  with Laws*       | 19  |
|   | *Section                  7.9* | *Mergers                  and Consolidations* | 19  |

| SECTION                  8. EVENTS                  OF DEFAULT AND REMEDIES. | 20                        |
|-----------------------------------------------------------------------------------|--------------------------------|
|                                                                              | *Section                  8.1* | *Events                  of Default* | 20 |
|                                                                              | *Section                  8.2* | *Non-Bankruptcy                  Defaults* | 21 |
|                                                                              | *Section                  8.3* | *Bankruptcy                  Defaults* | 22 |
|                                                                              | *Section                  8.4* | *Expenses* | 22 |

| SECTION                  9. CHANGE                  IN CIRCUMSTANCES. | 22                             |
|----------------------------------------------------------------------------|--------------------------------|
|                                                                       | *Section                  9.1* | *Change                  of Law* | 22 |
|                                                                       | *Section                  9.2* | *Unavailability                  of Deposits or Inability to Ascertain, or Inadequacy of,                  LIBOR* | 22 |
|                                                                       | *Section                  9.3* | *Increased                  Cost and Reduced Return* | 22 |
|                                                                       | *Section                  9.5* | *Lending                  Offices* | 24 |
|                                                                       | *Section                  9.6* | *Discretion                  of Lender as to Manner of Funding* | 24 |

| SECTION                  10. RESERVED. | 24 |
|---------------------------------------------|----|

| SECTION                  11. MISCELLANEOUS. | 24                               |
|--------------------------------------------------|----------------------------------|
|                                             | *Section                  11.1*  | *Withholding                  Taxes* | 24 |
|                                             | *Section                  11.2*  | *No                  Waiver of Rights* | 25 |
|                                             | *Section                  11.3*  | *Non-Business                  Day* | 25 |
|                                             | *Section                  11.4*  | *Documentary                  Taxes* | 25 |
|                                             | *Section                  11.5*  | *Survival                  of Representations* | 25 |
|                                             | *Section                  11.6*  | *Survival                  of Indemnities* | 25 |
|                                             | *Section                  11.7*  | *Set-Off* | 26 |
|                                             | *Section                  11.8*  | *Notices* | 26 |
|                                             | *Section                  11.9*  | *Counterparts* | 27 |
|                                             | *Section                  11.10* | *Successors                  and Assigns* | 27 |
|                                             | *Section                  11.11* | *[Reserved]*. | 27 |
|                                             | *Section                  11.12* | *Assignments,                  Participations, Etc* | 27 |
|                                             | *Section                  11.13* | *Amendments* | 29 |
|                                             | *Section                  11.14* | *Headings* | 29 |
|                                             | *Section                  11.15* | *Legal                  Fees, Other Costs and Indemnification* | 29 |
|                                             | *Section                  11.16* | *[Reserved]*. | 30 |
|                                             | *Section                  11.17* | *Entire                  Agreement* | 30 |
|                                             | *Section                  11.18* | *Construction* | 30 |
|                                             | *Section                  11.19* | *Governing                  Law* | 30 |
|                                             | *Section                  11.20* | **SUBMISSION                  TO JURISDICTION; WAIVER OF JURY TRIAL** | 30 |
|                                             | *Section                  11.21* | *Confidentiality* | 31 |
|                                             | *Section                  11.22* | *Patriot                  Act* | 31 |

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**CREDIT      AGREEMENT**

**SEASONAL      CREDIT AGREEMENT,**
*Borrower*
*Lender*

**WITNESSETH      THAT:**

**WHEREAS,**
*Revolving      Credit*

**WHEREAS,**

**NOW,      THEREFORE,**

*Section      1.1*
*Definitions*

*“Affiliate*
*control*
*controlled      by*
*under      common control with*

*Agreement*

*Applicable      Margin*

*Applicable      Telerate Page*

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*“Assignment      and Assumption”*

*Authorized      Representative*

*Base      Rate*

*Base      Rate Loan*

*Base      Rate Margin*

*Borrower*

*Borrowing*

*Business      Day*

*Capital*

*Capital      Lease*

*Capital      Ratio*

*Capitalized      Lease Obligations*

*Code*

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*Commitment      Fee Rate” *

*Compliance      Certificate*

*Consolidated      EBIT*

*Consolidated*
*Net      Worth*

*Contractual      Obligation*

*Controlled      Group*

*Credit      Documents*

*Credit      Event*

*Credit      Rating*

*Default*

*EBIT*

----

*Effective      Date*

*“Eligible      Assignee”*
*provided      *

*ERISA*

*Event      of Default*

*Existing      Credit Agreement*

*Federal      Funds Rate*

*GAAP*

*Guarantee*

*Indebtedness*

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*Interest      Period*

*Lender*

*Lending      Office*

*LIBOR*

*LIBOR      Loan*

*LIBOR      Margin*

*LIBOR      Reserve Percentage*

*Lien*

*Loan*

*Material      Adverse Effect*

*Non-Recourse      Indebtedness*

*Note*

*Obligations*

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*Person*

*Plan*

*PBGC*

*Property*

*Reference      Bank*

*Revolving      Credit Commitment*

*SEC*

*Significant      Subsidiary*

*SPC*

*Subsidiary*

*Telerate      Service*

*Termination      Date*

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*Unfunded      Vested Liabilities*

*Upfront      Fee*

*U.S.      Dollars*
*$*

*Utilization      Fee Rate*

*Welfare      Plan*

*Section      1.2*
*Interpretation*

*Section      2.1*
*The      Loan Commitment*
*Loan*
*Loans*
**$**
*Revolving      Credit Commitment*
*provided*

*Section      2.2*
*[Reserved]*

*Section      2.3*
*Applicable      Interest Rates*
*Base      Rate Loans*

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*Base      Rate*

*LIBOR      Loans*

*LIBOR*

*LIBOR      Index Rate*

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*Applicable      Telerate Page*
*Page      3750*

*LIBOR      Reserve Percentage*
*LIBOR      liabilities*
*LIBOR      liabilities*

*Rate      Determinations*

*Section      2.5*
*Minimum      Borrowing Amounts*

*Section      2.6*
*Manner      of Borrowing Loans and Designating Interest Rates Applicable to      Loans*
*Notice      to the Lender*

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*[Reserved]*

*Borrower’s      Failure to Notify*

*Section      2.8*
*Interest      Periods*
*Interest      Period*
*provided*
*however*

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*provided*
*however*

*Section      2.9*
*Maturity      of Loans*

*Section      2.10*
*Prepayments*

*Section      2.12*
*Default      Rate*

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*Section      2.13*
*Evidence      of Debt*
*.       *
*“Note”*

*Section      2.14*
*Funding      Indemnity*

----

*Section      2.15*
*Revolving      Credit Commitment Terminations*
*provided*

*Section      2.16*
*Regulation      D Compensation*

*Section      2.17*
*Arbitrage      Compensation*
*CP      Rate*
*Arbitrage      Condition*

*Section      3.1*
*Fees*

*Commitment      Fee*

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*(b)*
*[Reserved].*

*Utilization      Fee*

*Upfront      Fee*
*Upfront      Fee*

*[Reserved]*

*[Reserved]*

*Fee      Calculations*

*Section      4.1*
*Place      and Application of Payments*

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*Section      5.1*
*Corporate      Organization and Authority*

*Section      5.2*
*Corporate      Authority and Validity of Obligations*

*Section      5.3*
*Financial      Statements*

*Section      5.4*
*Approvals*

*Section      5.5*
*ERISA*
*ERISA*
*PBGC*

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*Section      5.6*
*Government      Regulation*
*investment      company*

*Section      5.7*
*Margin      Stock; Proceeds*
*margin      stock*

*Section      5.8*
*Full      Disclosure*

*Section      6.1*
*Initial      Credit Event*

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*Section      6.2*
*All      Credit Events*

*Section      7.1*
*Corporate      Existence*
*.      *

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*Section      7.2*
*ERISA*

*Section      7.3*
*Financial      Reports and Other Information*

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*Section      7.4*
*Regulation      U; Proceeds*

*Section      7.5*
*Sales      of Assets*

*Section      7.6*
*Capital      Ratio*

*Section      7.7*
*Compliance      with Laws*
*provided*
*however*

*Section      7.8*
*Mergers      and Consolidations*
*provided,      however*

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*Section      8.1*
*Events      of Default*

*provided*

----

*Material      Plan*

*Section      8.2*
*Non-Bankruptcy      Defaults*

----

*Section      8.3*
*Bankruptcy      Defaults*

*Section      8.4*
*Expenses*

*Section      9.1*
*Change      of Law*
*provided*
*however*

*Section      9.2*
*Unavailability      of Deposits or Inability to Ascertain, or Inadequacy of, LIBOR*

*Section      9.3*
*Increased      Cost and Reduced Return*

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----

*provided      however*

*Section      9.5*
*Lending      Offices*

*Section      9.6*
*Discretion      of Lender as to Manner of Funding*

*Section      11.1*
*Withholding      Taxes*

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*Section      11.2*
*No      Waiver of Rights*

*Section      11.3*
*Non-Business      Day*

*Section      11.4*
*Documentary      Taxes*

*Section      11.5*
*Survival      of Representations*

*Section      11.6*
*Survival      of Indemnities*

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*Section      11.7*
*Set-Off*

*Section      11.8*
*Notices*

|   | If                to the Borrower:                                                                                                                                                                                                                                                                                               |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                             |
|   | Peoples                Energy Corporation130                East Randolph DriveChicago,                Illinois 60601Attention:                Vice President, FinanceFacsimile:                312.373.4213Telephone:                312.240.3818                                                                               |
|   |                                                                                                                                                                                                                                                                                                                             |
|   | If                to the Lender: (Notices related to commitments, covenants or extensions                of                expiry/termination dates)                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                             |
|   | Bank                of America, N.A.100                Federal Street, MA5-100-09-08Boston,                MA 02110Attention:                Richard D. Hill, Jr./Dori J. AleksandrowiczFacsimile:                617-434-2160Telephone:                617-434-4080 (Mr. Hill) 617-434-3358                (Ms. Aleksandrowicz) |

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|   | Borrowing                Requests and notices relating to Loans, Interest and                Fees:                                                                                                                                                                                      |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                    |
|   | Bank                of America, N.A.100                Federal Street, MA5-100-09-02Boston,                MA 02110Attention:                Wun W. WongFacsimile:                617-310-2353Telephone:                617-434-9341E-mail:                wun.w.wong@bankofamerica.com |
|   |                                                                                                                                                                                                                                                                                    |

*provided      that*

*Section      11.9*
*Counterparts*

*Section      11.10*
*Successors      and Assigns*

*Section      11.11*
*[Reserved]*

*Section      11.12*
*Assignments,      Participations, Etc*

*Successors      and Assigns Generally  *

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*Assignments      by Lender. *
*provided*

*(c)*
*Participations.      *
*Participant”*
*provided*
*provided*

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*Limitations      upon Participant Rights. *

*(e)*
*Certain      Pledges. *
*Certain      Funding Arrangements. *
*SPC”*
*provided*

*Section      11.13*
*Amendments*

*Section      11.14*
*Headings*

*Section      11.15*
*Legal      Fees, Other Costs and Indemnification*

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*Section      11.16*
*[Reserved]*

*Section      11.17*
*Entire      Agreement*

*Section      11.18*
*Construction*

*Section      11.19*
*Governing      Law*

*Section      11.20*
**SUBMISSION      TO JURISDICTION; WAIVER OF JURY TRIAL**

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*Section      11.21*
*Confidentiality*
*bona      fide*
*provided*
*however*
*bona      fide *

*Section      11.22*
*Patriot      Act*

*Balance      of Page Intentionally Left Blank*

*-      Signature Page Follows -*

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|   | **PEOPLES                ENERGY CORPORATION**,                an Illinois corporation, as Borrower |
|--------|----------------------------------------------------------------------------------------------------|
|   |                                                                                               |
|   | By:                  /s/ Douglas M. Ruschau                                              |
|   | Its:                  Vice President & Treasurer                                     |
|   |                                                                                               |
|   |                                                                                               |

|   | **BANK                OF AMERICA, N.A**.,                as Lender |
|--------|--------------------------------------------------------------------|
|   |                                                               |
|   | By:                  /s/ Richard D. Hill, Jr.            |
|   | Its:                  Managing Director                  |
|   | Title:                _____________________                        |
|   |                                                               |

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**EXHIBIT      A**

**REVOLVING      NOTE**

|  $25,000,000 |  October                  20,                  2006 |
|-------------------|----------------------------------------------------------|

**FOR      VALUE RECEIVED,**
**PEOPLES      ENERGY CORPORATION**
*Borrower*
**BANK      OF AMERICA, N.A.**
*Bank*

*prima      facie*

*Credit      Agreement*

|   | **PEOPLES                ENERGY CORPORATION**,                an Illinois corporation    |
|--------|------------------------------------------------------------------------------------------|
|   |                                                                                     |
|   | By:                 __________________________        |
|   | Its:                 __________________________       |

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**EXHIBIT      B**

**COMPLIANCE      CERTIFICATE**

*Credit      Agreement*

|   |
|--------|
|   |
|   |
|   |

|   |   |
|--------|--------|

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**SCHEDULE      1 TO COMPLIANCE CERTIFICATE**

**CALCULATION      AS OF ________ __,200_**

| Capital                Ratio (Sec. 7.6)                                              |              |                                                                                            |
|--------------------------------------------------------------------------------------|-------------------|-------------------------------------------------------------------------------------------------|
| 1. (a)                consolidated Indebtedness                                 | $       |                                                                                            |
| (b)                *less*                accumulated other comprehensive income/loss |  $__________ |                                                                                            |
| (c)                net consolidated Indebtedness                                     | $__________       |                                                                                            |
| 2. Consolidated                Net Worth                                        | $       |                                                                                            |
| 3. Sum                of Line 1(c) *plus*                Line 2                 | $       |                                                                                            |
| 4. Capital                Ratio                                                 | _____ :1.00  | (ratio                of (A) Line 1(c) to (B) Line 3 not to exceed 0.65 to                1.00) |

| The                Peoples Gas Light and Coke Company Peoples                Gas Light Exploration CompanyPeoples                Gas Neighborhood Development CorporationNorth                Shore Gas Company North                Shore Exploration CompanyPeoples                District Energy Corporation Peoples                NGV Corp.  Peoples                Energy Production Company PEP                Holding, LLC Peoples                Energy Canadian Holdings, Inc.Peoples                Energy Production Company of CanadaPeoples                Energy Production Operating CompanyPeoples                Energy Production Partners, L.P.Peoples                Energy Production - Texas, L.P.EnerVest                Energy, L.P. Sierra                1996-I Limited PartnershipPeoples                Energy Resources Company, LLC Peoples                Energy Wholesale Marketing, LLC | PERC                Canada, Inc.Peoples                Natural Gas Liquids, LLCPERC                Holdings, LLC PV                Midstream Ventures, LLC PERC                Power, LLC COB                Energy Facility, LLCPeoples                Calumet, LLCCalumet                Power, LLCPeoples                Elwood, LLCElwood                Energy, LLC Peoples                Elwood Expansion, LLCElwood                Expansion, LLC Valencia                Energy, LLCPeoples                MW, LLC Peoples                Energy Services CorporationPeoples                Energy Ventures, LLC Peoples                Energy Business Services, LLCPeoples                Energy Home Services, LLCPeoples                Energy Neighborhood Development, LLCPeoples                Technology, LLC |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**SCHEDULE      1**

**LENDER’S      PAYMENT INFORMATION**

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**SCHEDULE      1A**

**PRICING      GRID**

**(Basis      Points)**

| **S                & P/ Moody’s Senior Un-Secured Rating** | **A/                A2 or higher** | **A-/                A3** | **BBB+/                Baa1** | **BBB/                Baa2** | **BBB-/                Baa3** | **lower                than BBB-/ Baa3** |
|----------------------------------------------------------------------|------------------------------------|---------------------------|-------------------------------|------------------------------|-------------------------------|------------------------------------------|
| **Commitment                Fee**                                    | 6.0                                | 7.0                       | 8.0                           | 10.0                         | 12.5                          | 20.0                                     |
| **Base                Rate Margin**                                  | 0.0                                | 0.0                       | 0.0                           | 0.0                          | 0.0                           | 0.0                                      |
| **LIBOR                Margin**                                      | 25.0                               | 30.0                      | 40.0                          | 50.0                         | 62.5                          | 87.5                                     |
| **Utilization                Fee (>50%)**                         | 10.0                               | 10.0                      | 12.5                          | 12.5                         | 12.5                          | 12.5                                     |

*If      the Borrower is split-rated and the ratings differential is one level, the      higher rating will apply. If the Borrower is split-rated and the ratings      differential is two levels or more, the rating level one below the higher level      will apply. If at any time the Borrower has no Moody’s rating or no Standard& Poors’ rating, the “Lower than BBB-/Baa3” level will apply; provided,      however, that in such event the Borrower may propose an alternative rating      agency or mechanism in replacement thereof.*

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