Exhibit 10(a)
                                                                 
                                               Contract #: T1062F
                                
                NORTHERN BORDER PIPELINE COMPANY
                 U.S. SHIPPERS SERVICE AGREEMENT

This Agreement (the "Service Agreement") is made and entered into
at  Omaha,  Nebraska as of    August 14, 1997,    by and  between
NORTHERN  BORDER  PIPELINE COMPANY, hereinafter  referred  to  as
"Company"  and  THE  PEOPLES GAS LIGHT  AND  COKE  COMPANY,  a(n)
   Illinois    corporation, hereinafter referred to as "Shipper".

WHEREAS, Company's investors and lenders rely on Certificates  of
Public  Convenience and Necessity granted by the  Federal  Energy
Regulatory Commission and on the Tariff for the return of and the
return on all funds invested in or loaned to the Company; and

WHEREAS,  the transportation of natural gas shall be  effectuated
pursuant to Part 157 or Part 284 of the Federal Energy Regulatory
Commission's Regulations; and

WHEREAS,  Company recognizes that it will be a condition  to  the
initial   effectiveness   of   this   Service   Agreement   that,
notwithstanding any other provision of the Tariff or this Service
Agreement,   the   FERC   and  all  other   appropriate   federal
governmental  authorities and/or agencies in  the  United  States
shall  have  issued,  under  terms and conditions  acceptable  to
Shipper, all final nonappealable authorizations and certificates;

NOW THEREFORE, in consideration of their respective covenants and
agreements hereinafter set out, the parties hereto covenant and
agree as follows:

Article 1 - Basic Receipts

Shipper  shall  on  each  day beginning  with  Shipper's  Billing
Commencement  Date, as defined in Section 1 of the General  Terms
and  Conditions  of  Company's FERC Gas Tariff,  be  entitled  to
tender  and,  following tender, deliver to Company,  at  each  of
Shipper's  Points of Receipt, a quantity of gas not in excess  of
the  Daily  Receipt Quantity for such Point of Receipt  for  such
day,  as  defined in such Section 1, and Company shall,  on  such
day,  take  receipt  of  the quantity  of  gas  so  tendered  and
delivered by Shipper at such Point of Receipt.

Article 2 - Excess Receipts

If Shipper shall desire to tender to Company on any day beginning
with  Shipper's  Billing Commencement Date, at any  of  Shipper's
Points of Receipt, a quantity of gas in excess of Shipper's Daily
Receipt Quantity for such Point of Receipt for such day, it shall
notify  Company of such desire. If Company in its sole  judgment,
determines  that  it  has  available the  necessary  capacity  to
receive and transport all or any part of such excess quantity and
make  deliveries in respect thereof, and that the performance  of
Company's  obligations to other Shippers under  their  Agreements
will  not  be  adversely affected thereby, Company may  elect  to
receive  from  Shipper said excess quantity or part thereof,  and
shall so notify Shipper. Scheduling of Excess Receipts will be in
accordance with Section 10 of the General Terms and Conditions.


                               -1-
                                                                 
                                                                 
                                               Contract #: T1062F
                                
                NORTHERN BORDER PIPELINE COMPANY
                 U.S. SHIPPERS SERVICE AGREEMENT
                                
Article 3 - Deliveries

Company  shall deliver gas to Shipper at the Point(s) of Delivery
and  under  the conditions specified in Exhibit A hereto  and  in
accordance with Section 13 of the General Terms and Conditions.

Article 4 - Payments

Shipper shall make payments to Company in accordance with Rate
Schedules T-1 and OT-1 and the other applicable terms and
provisions of this Service Agreement.

Article 5 - Change in Tariff Provisions

Upon notice to Shipper, Company shall have the right to file with
the Federal Energy Regulatory Commission any changes in the terms
of  any  of  its Rate Schedules, General Terms and Conditions  or
Form  of Service Agreement as Company may deem necessary, and  to
make such changes effective at such times as Company desires  and
is  possible under applicable law. Shipper may protest any  filed
changes  before  the  Federal Energy  Regulatory  Commission  and
exercise any other rights it may have with respect thereto.

Article 6 - Cancellation of Prior Agreements

When this Service Agreement becomes effective, it shall
supersede, cancel and terminate the following Agreements:
-none-

Article 7 - Term

This  Service Agreement shall become effective upon its execution
and   shall  under  all  circumstances  continue  in  effect   in
accordance  with the Tariff for ten (10) years after the  Billing
Commencement  Date, defined herein as the later  of  November  1,
1998,  or the in-service date of the facilities certificated  for
the  construction  and operation in a Federal  Energy  Regulatory
Commission proceeding prosecuted by Company in reliance upon this
Agreement, and shall continue in effect thereafter until extended
or terminated in accordance with Section 5 of the Rate Schedule T-
1.  Shipper shall give Company not less than six (6) months prior
written  notice  of  Shipper's intent to terminate  this  Service
Agreement.  Service rendered pursuant to this  Service  Agreement
shall be abandoned upon termination of this Service Agreement.

This Service Agreement shall automatically terminate and be of no
further  force and effect unless Shipper shall furnish  a  proper
security arrangement, in accordance with Subsection 9.1  of  Rate
Schedule T-1, to the Company within thirty (30) days after notice
from  the  Company subsequent to the occurrence  of  any  of  the
following events:



                              - 2 -
                                                                 
                                                                 
                                               Contract #: T1062F
                                
                NORTHERN BORDER PIPELINE COMPANY
                 U.S. SHIPPERS SERVICE AGREEMENT

     The  filing by Shipper or its parent of a voluntary petition
     in  bankruptcy or the entry of a decree or order by a  court
     having jurisdiction in the premises adjudging the Shipper as
     bankrupt  or  insolvent, or approving as  properly  filed  a
     petition seeking reorganization, arrangement, adjustment  or
     composition  of  or  in  respect of the  Shipper  under  the
     Federal  Bankruptcy Act or any other applicable  federal  or
     state  law, or appointing a receiver, liquidator,  assignee,
     trustee,  sequestrator (or other similar  official)  of  the
     Shipper  or  any  substantial part of its property,  or  the
     ordering  of  the winding-up or liquidation of its  affairs,
     with  said order or decree continuing unstayed and in effect
     for a period of sixty (60) consecutive days.

     A failure by Shipper to pay in full the undisputed amount of
     any invoice rendered by Company shall continue for ten (10)
     days from the date payment is due.

Termination  of this Service Agreement shall not relieve  Company
and  Shipper of the obligation to correct any Receipt or Delivery
Imbalances  hereunder, or Shipper to pay money due  hereunder  to
Company  and  shall  be in addition to any  other  remedies  that
Company may have.

Article 8 - Applicable Law and Submission to Jurisdiction

This  Service Agreement and Company's Tariff, and the rights  and
obligations of Company and Shipper thereunder are subject to  all
relevant  United  States lawful statutes, rules, regulations  and
orders  of  duly  constituted  authorities  having  jurisdiction.
Subject  to  the  foregoing,  this  Service  Agreement  shall  be
governed  by and interpreted in accordance with the laws  of  the
State  of  Nebraska.  For  purposes of  legal  proceedings,  this
Service Agreement shall be deemed to have been made in the  State
of  Nebraska  and to be performed there, and the Courts  of  that
State  shall have jurisdiction over all disputes which may  arise
under this Service Agreement, provided always that nothing herein
contained  shall  prevent  the Company  from  proceeding  at  its
election  against the Shipper in the Courts of any  other  state,
Province or country.

At  the  Company's request, the Shipper shall irrevocably appoint
an  agent  in  Nebraska to receive, for it  and  on  its  behalf,
service of process in connection with any judicial proceeding  in
Nebraska  relating to this Service Agreement. Such service  shall
be  deemed completed on delivery to such process agent  (even  if
not  forwarded  to and received by the Shipper).  If  said  agent
ceases  to  act as a process agent within Nebraska on  behalf  of
Shipper,  the  Shipper shall appoint a substitute  process  agent
within  Nebraska  and deliver to the Company a copy  of  the  new
agent's acceptance of that appointment within 30 days.








                               -3-
                                                                 
                                                                 
                                               Contract #: T1062F
                                
                NORTHERN BORDER PIPELINE COMPANY
                 U.S. SHIPPERS SERVICE AGREEMENT

Article 9 - Successors and Assigns

Any  person which shall succeed by purchase, amalgamation, merger
or consolidation to the properties, substantially as an entirety,
of  Shipper  or of Company, as the case may be, and  which  shall
assume  all  obligations  under Shipper's  Service  Agreement  of
Shipper or Company, as the case may be, shall be entitled to  the
rights,  and  shall  be  subject  to  the  obligations,  of   its
predecessor under Shipper's Service Agreement. Either party to  a
Shipper's  Service Agreement may pledge or charge the same  under
the  provisions  of  any  mortgage,  deed  of  trust,  indenture,
security  agreement or similar instrument which it has  executed,
or  assign such Service Agreement to any affiliated Person (which
for  such purpose shall mean any person which controls, is  under
common  control  with  or is controlled by such  party).  Nothing
contained  in this Article 9 shall, however, operate  to  release
predecessor  Shipper  from  its  obligation  under  its   Service
Agreement  unless Company shall, in its sole discretion,  consent
in  writing  to  such release, which it shall not  do  unless  it
concludes that, on the basis of the facts available to  it,  such
release  is not likely to have a substantial adverse effect  upon
other  Shippers or other Persons who may become liable to provide
funds  to  Company  to enable it to meet any of its  obligations.
Company shall not release any Shipper from its obligations  under
its  Service Agreement without the written consent of  the  other
Shippers  unless:  (a) such release is effected  pursuant  to  an
assignment  of  obligations by such Shipper, and  the  assumption
thereof  by  the  assignee, and the terms of such assignment  and
assumption  render the obligations being assigned and assumed  no
more  conditional  and no less absolute than those  at  the  time
provided  therein; and (b) such release is not likely to  have  a
substantial  adverse effect upon Company or the  other  Shippers.
For  the purposes hereof, and without limiting the generality  of
the  foregoing,  any release of any Shipper from its  obligations
under  its  Service Agreement shall be deemed likely  to  have  a
substantial adverse effect upon Company or the other Shippers  if
the  assignee of such obligations has a credit standing which  is
not at least equal to the credit standing of the assignor of such
obligations  (credit standings in each case as reflected  by  the
ratings  on  outstanding  debt securities  by  Moody's  Investors
Service,  Standard  and  Poor's  Corporation  or  another  rating
service acceptable to all Shippers to the extent available or  by
other   appropriate  objective  measures).  Shipper   shall,   at
Company's  request, execute such instruments and take such  other
action  as may be desirable to give effect to any such assignment
of  Company's rights under such Shipper's Service Agreement or to
give  effect  to  the  right of a Person  whom  the  Company  has
specified  pursuant  to  Section  6  of  the  General  Terms  and
Conditions  of  Company's FERC Gas Tariff as the Person  to  whom
payment  of amounts invoiced by Company shall be made;  provided,
however,  that: (a) Shipper shall not be required to execute  any
such  instruments  or take any such other action  the  effect  of
which  is  to  modify  the respective rights and  obligations  of
either  Shipper or Company under this Service Agreement; and  (b)
Shipper shall be under no obligation at any time to determine the
status or amount of any payments which may be due from Company to
any  Person  whom  the  Company has specified  pursuant  to  said
Section  6  as the Person to whom payment of amounts invoiced  by
Company shall be made.



                               -4-
                                               Contract #: T1062F
                                
                NORTHERN BORDER PIPELINE COMPANY
                 U.S. SHIPPERS SERVICE AGREEMENT

Article 10 - Loss of Governmental Authority, Gas Supply,
Transportation or Market

Without limiting its other responsibilities and obligations under
this  Service  Agreement,  the Shipper acknowledges  that  it  is
responsible  for obtaining and assumes the risk of  loss  of  the
following:  (1)  gas  removal  permits,  (2)  export  and  import
licenses,  (3)  gas  supply, (4) markets and  (5)  transportation
upstream  and  downstream  of  the  Company's  pipeline   system.
Notwithstanding  the loss of one of the items  enumerated  above,
Shipper shall continue to be liable for payment to the Company of
the  transportation  charges  as provided  for  in  this  Service
Agreement.

Article 11 - Other Operating Provisions

(This Article to be utilized when necessary to specify other
operating provisions.)

Article 12  -  Exhibit A of Service Agreement, Rate Schedules and
          General Terms and Conditions

Company's Rate Schedules and General Terms and Conditions,  which
are on file with the Federal Energy Regulatory Commission and  in
effect,  and Exhibit A hereto are all applicable to this  Service
Agreement  and are hereby incorporated in, and made  a  part  of,
this  Service  Agreement.  In  the  event  that  the  terms   and
conditions  herein  are in conflict with the  General  Terms  and
Conditions in Company's FERC Gas Tariff, the terms and conditions
of this Service Agreement are controlling.

IN WITNESS WHEREOF, The parties hereto have caused this Service
Agreement to be duly executed as of the day and year first set
forth above.

ATTEST:                 NORTHERN BORDER PIPELINE COMPANY
                        By: Northern Plains Natural Gas Company,
                            Operator


 /s/ Eva Neufeld            By:   /s/ Robert A. Hill
Assistant Secretary
                            Title:   Vice President

ATTEST:                 THE PEOPLES GAS LIGHT AND COKE COMPANY

_____________________   By:   /s/ William E. Morrow

                            Title:   Vice President
                                


                               -5-
                                                                 
                                                                 
                                               Contract #: T1062F
                                
                NORTHERN BORDER PIPELINE COMPANY
                 U.S. SHIPPERS SERVICE AGREEMENT
                                
          EXHIBIT A TO U.S. SHIPPERS SERVICE AGREEMENT


Company:            NORTHERN BORDER PIPELINE COMPANY

Company's Address:  1111 South 103rd Street
                    Omaha, Nebraska   68124-1000

Shipper:            THE PEOPLES GAS LIGHT AND COKE COMPANY
                    Attn:  Mr. Roulando DeLara

Shipper's Address:  130 E. Randolph Dr., 22nd Floor
                    Chicago, IL   60601


                                    Maximum   Minimum     Maximum       
                 Role     Maximum   Receipt   Delivery    Receipt   Minimum
                (Notes   Quantity   Pressure  Pressure  Temperature Tempera
    Points     1 and 3)  (MCF/Day)   (PSIG)    (PSIG)      (F)       ture
                                                                      (F)
                                                                        
Harper, IA        RD      200,000      --        --         --         --
                  TP      200,000      --        --         --         --
                  PD      200,000      --       712         --         32
                  DD      200,000      --        --         --         --
                                                                        
Iowa City, IA     RD      100,000      --        --         --         --
(Secondary-       TP      200,000      --        --         --         --
Note 2)
                  PD      100,000      --       600         --         32
                  DD      100,000      --        --         --         --
                                                                        
Davenport, IA     RD      100,000      --        --         --         --
(Secondary-       TP      200,000      --        --         --         --
Note 2)
                  PD      100,000      --       650         --         32
                  DD      100,000      --        --         --         --
                                                                        
Prophetstown,     RD      50,000       --        --         --         --
IL
(Secondary-       TP      200,000      --        --         --         --
Note 2)
                  PD      50,000       --       600         --         32
                  DD      50,000       --        --         --         --
                                                                        
Troy Grove, IL    RD      200,000      --        --         --         --
(Secondary-       TP      200,000      --        --         --         --
Note 2)
                  PD      200,000      --       750         --         32
                  DD      200,000      --        --         --         --




                               -6-
                                                                 
                                                                 
                                               Contract #: T1062F
                                
                NORTHERN BORDER PIPELINE COMPANY
                 U.S. SHIPPERS SERVICE AGREEMENT


    EXHIBIT A TO U.S. SHIPPERS SERVICE AGREEMENT (continued)

                                      Maximum   Minimum     Maximum      
                  Role     Maximum    Receipt  Delivery     Receipt   Minim
                 (Notes    Quantity  Pressure  Pressure   Temperature   um
    Points      1 and 3)  (MCF/Day)   (PSIG)    (PSIG)       (F)     Tempe
                                                                      ratur
                                                                        e
                                                                       (F)
                                                                         
Minooka, IL        RD      200,000      --        --          --        --
(Secondary-        TP      200,000      --        --          --        --
Note2)
                   PD      200,000      --        550         --        32
                   DD      200,000      --        --          --        --
                                                                         
Channahon, IL      RD      200,000      --        --          --        --
(Secondary-        TP      200,000      --        --          --        --
Note 2)
                   PD      200,000      --        850         --        32
                   DD      200,000      --        --          --        --
                                                                         
Joliet, IL         RD      200,000      --        --          --        --
(Secondary-        TP      200,000      --        --          --        --
Note 2)
                   PD      200,000      --        850         --        32
                   DD      200,000      --        --          --        --
                                                                         
Manhattan, IL      RD      200,000      --        --          --        --
                   TP      200,000      --        --          --        --
                   PD      200,000      --        858         --        32
                   DD      200,000      --        --          --        --
                                                                         
Total Maximum                                                            
Receipt                    200,000                                       
Quantity                     MCF


Note 1:    The point role will be either PR for physical
      receipts,       RD for receipt by displacement, TP for
      transfer points, PD  for physical deliveries, and DD for
      delivery by displacement.

Note 2:    Should nominations at secondary receipt and delivery
      points be received which exceed available capacity,
      volumes will be scheduled in accordance with Northern
      Border's nomination and scheduling procedures.








                               -7-
                                                                 
                                                                 
                                               Contract #: T1062F
                                
                NORTHERN BORDER PIPELINE COMPANY
                 U.S. SHIPPERS SERVICE AGREEMENT


    EXHIBIT A TO U.S. SHIPPERS SERVICE AGREEMENT (continued)

Note 3:For receipt or delivery of gas by displacement, Company
       cannot and does not have an obligation to physically
       deliver or receive gas at these points. Volumes will be
       delivered or received at these point(s) only to the
       extent that corresponding equal or greater volumes are
       received or delivered by other parties at these points on
       the same day. These corresponding volumes will be used to
       displace volumes nominated for delivery or receipt by
       Shipper.

Note 4:Gas volumes which are nominated/scheduled at a sub
       primary receipt or delivery point(s) have priority over
       gas volumes of shipper utilizing such point on a
       corresponding basis as a secondary receipt or delivery
       point. Shipper's rights and obligations regarding the use
       of sub primary points are governed by Subsection 17.1 of
       the General Terms and Conditions of the Tariff.

This Exhibit A is made and entered into as of  August 14, 1997 .
On the effective date designated by the Federal Energy Regulatory
Commission, it shall supersede the Exhibit A dated as of  N/A  .

The effective date of this Exhibit A is    August 14, 1997   .

ATTEST:                  NORTHERN BORDER PIPELINE COMPANY
                         By:  Northern Plains Natural Gas
Company,
                            Operator

 /s/ Eva Neufeld            By:   /s/ Robert A. Hill
     Assistant Secretary
                            Title:   Vice President


ATTEST:                  THE PEOPLES GAS LIGHT AND COKE COMPANY

______________________   By:   /s/ William E. Morrow

                         Title:   Vice President







                               -8-
                                                     
                                                     
                                                     Amendment
                                                     #2
                                                     #1495

                AMENDMENT TO PRECEDENT AGREEMENT
                             BETWEEN
                NORTHERN BORDER PIPELINE COMPANY
                               AND
             THE PEOPLES GAS LIGHT AND COKE COMPANY
                      DATED AUGUST 10, 1995

This Amendment is entered into as of this    15th    day of July,
1997, by and between NORTHERN BORDER PIPELINE COMPANY, and THE
PEOPLES GAS LIGHT AND COKE COMPANY.

The parties hereby agree as follows:

     Article 5(iii) of the Precedent Agreement concerning
     termination rights and required notice, shall be amended to
     read as follows:

               STRIKE "July 1, 1997" and substitute
                      "August 1, 1997"; and

               STRIKE "July 15, 1997" and substitute
                      "August 15, 1997"

IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed as of the day and year set forth above.

                        NORTHERN BORDER PIPELINE COMPANY
                        By: Northern Plains Natural Gas Company,
Operator

                        By:   /s/ Robert A. Hill

                        Title:   Vice President


ATTEST:                 THE PEOPLES GAS LIGHT AND COKE COMPANY
                                    /s/ Thomas M. Patrick
   /s/ Thomas W. Harwig     By:   Thomas M. Patrick
   Assistant Secretary
                            Title:   Executive Vice President

ATTEST:                     By: _____________________________

________________________    Title: __________________________