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<FONT FACE="Arial">
<P> </P>
<P ALIGN="right">Exhibit 3(b)   </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
</FONT><B><FONT FACE="Arial" SIZE=5><P><CENTER>BY-LAWS</CENTER></P>
</B></FONT><FONT FACE="Arial" SIZE=4>
<P> </P>
</FONT><B><FONT FACE="Arial" SIZE=5><P><CENTER>OF</CENTER></P>
</B></FONT><FONT FACE="Arial" SIZE=4>
<P> </P>
</FONT><B><FONT FACE="Arial" SIZE=5><P><CENTER>PEOPLES ENERGY CORPORATION</CENTER></P>
</B></FONT><FONT FACE="Arial" SIZE=4>
</FONT><FONT FACE="Arial"><P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<B><P ALIGN="RIGHT"> AMENDED NOVEMBER 3, 1999</P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
</B><P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=439>
<TR><TD VALIGN="TOP" COLSPAN=3>
<U><FONT FACE="Arial"><P ALIGN="CENTER">PEOPLES ENERGY CORPORATION</U></FONT></TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="67%" VALIGN="TOP"> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=3>
<U><FONT FACE="Arial"><P ALIGN="CENTER">BY-LAWS</U></FONT></TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="67%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="67%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP">
<FONT FACE="Arial"><P>ARTICLE I</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial"><P>-</FONT></TD>
<TD WIDTH="67%" VALIGN="TOP">
<FONT FACE="Arial"><P>Offices</FONT></TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="67%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP">
<FONT FACE="Arial"><P>ARTICLE II</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial"><P>-</FONT></TD>
<TD WIDTH="67%" VALIGN="TOP">
<FONT FACE="Arial"><P>Meetings of Shareholders</FONT></TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="67%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP">
<FONT FACE="Arial"><P>ARTICLE III</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial"><P>-</FONT></TD>
<TD WIDTH="67%" VALIGN="TOP">
<FONT FACE="Arial"><P>Directors and Committees</FONT></TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="67%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP">
<FONT FACE="Arial"><P>ARTICLE IV</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial"><P>-</FONT></TD>
<TD WIDTH="67%" VALIGN="TOP">
<FONT FACE="Arial"><P>Officers</FONT></TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="67%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP">
<FONT FACE="Arial"><P>ARTICLE V</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial"><P>-</FONT></TD>
<TD WIDTH="67%" VALIGN="TOP">
<FONT FACE="Arial"><P>Indemnification of Directors,</FONT></TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="67%" VALIGN="TOP">
<FONT FACE="Arial"><P>    Officers, Employees and Agents</FONT></TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="67%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP">
<FONT FACE="Arial"><P>ARTICLE VI</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial"><P>-</FONT></TD>
<TD WIDTH="67%" VALIGN="TOP">
<FONT FACE="Arial"><P>Certificates of Stock and Their</FONT></TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="67%" VALIGN="TOP">
<FONT FACE="Arial"><P>    Transfer</FONT></TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="67%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP">
<FONT FACE="Arial"><P>ARTICLE VII</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial"><P>-</FONT></TD>
<TD WIDTH="67%" VALIGN="TOP">
<FONT FACE="Arial"><P>Miscellaneous (Contracts)</FONT></TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="67%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP">
<FONT FACE="Arial"><P>ARTICLE VIII</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial"><P>-</FONT></TD>
<TD WIDTH="67%" VALIGN="TOP">
<FONT FACE="Arial"><P>Amendment or Repeal of By-Laws</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT FACE="Arial"></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=437>
<TR><TD VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial"><P ALIGN="CENTER"> </P>
<U><P ALIGN="CENTER">PEOPLES ENERGY CORPORATION</U></FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2>
<U><FONT FACE="Arial"><P ALIGN="CENTER">INDEX</U></FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP">
<U><FONT FACE="Arial"><P ALIGN="CENTER">PAGE</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial"><P ALIGN="CENTER">A</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Amendment of By-Laws</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">18</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Appointment of Officers</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">10</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Assistant Controller, Duties of</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">13</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Assistant General Counsel, Duties of</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">13</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Assistant Secretary, Duties of</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">13</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Assistant Treasurer, Duties of</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">13</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Assistant Vice President, Duties of</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">12</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial"><P ALIGN="CENTER">B</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Board of Directors</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">5</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial"><P ALIGN="CENTER">C</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Certificates of Stock and Their Transfer</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">15</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Chairman of the Board, Duties of</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">11</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Chairman of the Executive Committee</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">8</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Committees</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>  Executive</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">8</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>  Other</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">9</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Controller, Duties of</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">13</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Contracts, Execution of</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">17</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial"><P ALIGN="CENTER">D</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Directors and Committees</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">5</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial"><P ALIGN="CENTER">E</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Election of Directors</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">5</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Election of Officers</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">10</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Executive Committee</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">8</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial"><P ALIGN="CENTER">F</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Fees and Compensation</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">9</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2>
<P> </P></FONT>
<P> </P>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=437>
<TR><TD VALIGN="TOP" COLSPAN=2>
<U><FONT FACE="Arial"><P ALIGN="CENTER">PEOPLES ENERGY CORPORATION</U></FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP">
<U><FONT FACE="Arial"><P ALIGN="CENTER">PAGE</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial"><P ALIGN="CENTER">G</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>General Counsel, Duties of</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">13</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial"><P ALIGN="CENTER">I</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Indemnification of Directors, Officers, Employees</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>  and Agents</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">14</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial"><P ALIGN="CENTER">M</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Meetings</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>  Directors</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">7</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>    Action Without Meeting</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">9</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>  Shareholders</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">1</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial"><P ALIGN="CENTER">N</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Notice of Meetings</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>  Directors</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">7</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>  Shareholders</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">2</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial"><P ALIGN="CENTER">O</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Officers</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>  Appointed</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">10</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>  Elected</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">10</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Offices, Two or More Held By One Person</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">10</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">P</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>President, Duties of</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">11</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Presiding Officer</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>  Board Meetings</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">8</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>  Shareholders Meetings</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">5</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Proxies</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">4</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2>
<P> </P></FONT>
<P> </P>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=437>
<TR><TD VALIGN="TOP" COLSPAN=2>
<U><FONT FACE="Arial"><P ALIGN="CENTER">PEOPLES ENERGY CORPORATION</U></FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP">
<U><FONT FACE="Arial"><P ALIGN="CENTER">PAGE</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial"><P ALIGN="CENTER">Q</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Quorum</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>  Board</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">7</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>  Shareholders</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">4</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">S</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Secretary, Duties of</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">12</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Signatures to Checks, Drafts, etc.</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">17</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Stock, Certificates of and their Transfer</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">15</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">T</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Treasurer, Duties</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">12</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">V</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Vice President, Duties of</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">12</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>Voting</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>  Shareholders</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">4</FONT></TD>
</TR>
<TR><TD WIDTH="84%" VALIGN="TOP">
<FONT FACE="Arial"><P>  Stock Owned by Company</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial"><P ALIGN="CENTER">18</FONT></TD>
</TR>
</TABLE>
</CENTER></P>


<P> </P>
<P> </P>
<P> </P>
<P><CENTER>BY-LAWS</CENTER></P>
<P><CENTER>OF</CENTER></P>
<P><CENTER>PEOPLES ENERGY CORPORATION</CENTER></P>
<P><CENTER>ARTICLE I</CENTER></P>
<U><P><CENTER>Offices</CENTER></P></U>
<BLOCKQUOTE><P>          SECTION 1.1.  <U>Principal Office.</U>  The principal office of the Company shall be in the City of Chicago, County of Cook and State of Illinois.</P>

<P>          SECTION 1.2.  <U>Other Offices.</U>  The Company may also have offices at such other places both within and without the State of Illinois as the Board of Directors may from time to time
determine or the business of the Company may require.</P>

<P><CENTER>ARTICLE II</CENTER></P>
<U><P><CENTER>Meetings of Shareholders</CENTER></P></U>
<P>          SECTION 2.1.  <U>Annual Meeting.</U>  The annual meeting of the shareholders shall be held on the fourth Friday of the month of February in each year, if not a legal holiday, or, if a legal
holiday, then on the next succeeding business day, for the purpose of electing directors and for the transaction of such other business as may come before the meeting.  If the election of directors shall not be held on the day herein designated for the
annual

<P>          SECTION 2.2.  <U>Special Meetings.</U>  Except as otherwise prescribed by statute, special meetings of the shareholders for any purpose or purposes, may be called by the Chairman of the Board,
the Vice Chairman of the Executive Committee, the Executive Committee or the President.  Such request shall state the purpose or purposes of the proposed meeting.</P>

<P>          SECTION 2.3.  <U>Place of Meetings.</U>  Each meeting of the shareholders for the election of the directors shall be held at the principal office of the Company in the City of Chicago,
Illinois, unless the Board of Directors shall by resolution designate another place as the place of such meeting.  Meetings of shareholders for any other purpose may be held at such place, and at such time as shall be determined by the Chairman of the
Board, or th

<P>          SECTION 2.4.  <U>Notice of Meetings.</U>  Written or printed notice stating the place, date and hour of each annual or special meeting of the shareholders, and, in the case of a special
meeting, the purpose or purposes for which the meeting is called, shall be given not less than 10 nor more than 60 days before the date of the meeting, except as otherwise provided in this section or by statute.  Notice of any meeting of the shareholders
may be w

<P>          SECTION 2.5.  <U>Quorum.</U>  The holders of a majority of the shares issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall be requisite for,
and shall constitute, a quorum at all meetings of the shareholders of the Company for the transaction of business, except as otherwise provided by statute or these by-laws.  If a quorum shall not be present or represented at any meeting of the
shareholders, t

<P>          SECTION 2.6.  <U>Proxies.</U>  At every meeting of the shareholders, each shareholder having the right to vote thereat shall be entitled to vote in person or by proxy.  Such proxy shall be
appointed by an instrument in writing subscribed by such shareholder and bearing a date not more than eleven months prior to such meeting, unless such proxy provides for a longer period, and shall be filed with the Secretary of the Company before, or at
the ti

<P>          SECTION 2.7.  <U>Voting.</U>  At each meeting of the shareholders, each shareholder shall be entitled to one vote for each share of stock entitled to vote thereat which is registered in the
name of such shareholder on the books of the Company.  At all elections of directors of the Company, the holders of shares of stock of the Company shall be entitled to cumulative voting.  When a quorum is present at any meeting of the shareholders, the
vote o

<P>          SECTION 2.8.  <U>Presiding Officer.</U>  The presiding officer of any meeting of the shareholders shall be the Chairman of the Board or, in the case of the absence of the Chairman of the
Board, the President.</P>

<P><CENTER>ARTICLE III</CENTER></P>
<U><P><CENTER>Directors and Committees</CENTER></P></U>
<P>          SECTION 3.1.  <U>Number and Election.</U>  The business and affairs of the Company shall be managed and controlled by a Board of Directors, ten (10) in number, none of whom need to be a
shareholder, which number may be altered from time to time by amendment of these by-laws, but shall never be less than three (3).  Except as provided in the Articles of Incorporation, the directors shall be elected by the shareholders entitled to vote at
the annu

<P>          SECTION 3.2.  <U>Regular Meetings.</U>  A regular meeting of the Board of Directors shall be held immediately, or as soon as practicable, after the annual meeting of the shareholders in each
year for the purpose of electing officers and for the transaction of such other business as may be deemed necessary, and regular meetings of the Board shall be held at such date and time and at such place as the Board of Directors may from time to time
deter

<P>          SECTION 3.3.  <U>Special Meetings.</U>  Special meetings of the Board may be called at any time by the Chairman of the Board, the President, or by any two directors, by causing the Secretary
to send by personal delivery, mail, overnight courier, telegram or facsimile, to each director, not less than three days before the time of such meeting, a written notice stating the time and place of such meeting.  Notice of any meeting of the Board may
be

<P>          SECTION 3.4.  <U>Quorum.</U>  At each meeting of the Board of Directors, the presence of not less than a majority of the total number of directors specified in Section 3.1 hereof shall be
necessary and sufficient to constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise
specifically pro

<P>          SECTION 3.5.  <U>Presiding Officer.</U>  The presiding officer of any meeting of the Board of Directors shall be the Chairman of the Board.  In the case of the absence of the Chairman of the
Board, for reasons other than provided in Section 4.3, the President shall act in his place and stead.  In the case of the temporary absence of both the Chairman of the Board and the President, the Vice Chairman of the Executive Committee or, in his
absence,

<P>          SECTION 3.6.  <U>Executive Committee.</U>  The Executive Committee of the Board of Directors shall consist of the Chairman of the Board who shall be the Chairman of the Executive Committee,
and each of the nonmanagement directors.  The Chairman of the Board shall select a Vice Chairman of the Executive Committee subject to the approval of the Board of Directors of the Company.  The Executive Committee shall, in the recess of the Board, have
all

<P>          SECTION 3.7.  <U>Other Committees.</U>  The Board may appoint other committees, standing or special, from time to time from among its own members or otherwise, and may confer such powers on
such committees as the Board may determine and may revoke such powers and terminate the existence of such committees at its pleasure.</P>

<P>          SECTION 3.8.  <U>Action Without Meeting.</U>  Any action required or permitted to be taken at any meeting of the Board of Directors, or any committee thereof, may be taken without a meeting if
all members of the Board or of such committee, as the case may be, consent thereto in writing and such writing or writings are filed with the minutes of the proceedings of the Board or such committee.</P>

<P>          SECTION 3.9.  <U>Fees and Compensation of Directors.</U>  Directors shall not receive any stated salary for their services as such; but, by resolution of the Board of Directors, reasonable
fees, with or without expenses of attendance, may be allowed.  Members of the Board shall be allowed their reasonable traveling expenses when actually engaged in the business of the Company, to be audited and allowed as in other cases of demands against
the Co

<P><CENTER>ARTICLE IV</CENTER></P>
<U><P><CENTER>Officers</CENTER></P></U>
<P>          SECTION 4.1.  <U>Election of Officers.</U>  There shall be elected by the Board of Directors in each year the following officers:  a Chairman of the Board; a President; such number of Senior
Vice Presidents, such number of Executive Vice Presidents, such number of Vice Presidents and such number of Assistant Vice Presidents as the Board at the time may decide upon; a Secretary; such number of Assistant Secretaries as the Board at the time may
de

<P>          SECTION 4.2.  <U>Appointment of Officers.</U>  The Board of Directors, the Executive Committee, the Chairman of the Board, or the President may from time to time appoint such other officers as
may be deemed necessary, including one or more Vice Presidents, one or more Assistant Vice Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers, one or more Assistant Controllers and one or more Assistant General Counsel, and suc of the Company as may be deemed proper.  Such officers, agents and employees shall have such authority, perform such duties and receive such compensation as the Board of Directors, the Executive Committee or, in the case of appointments made by the
Chairman of the Board or the President, as the Chairman of the Board or the President, may from time to time prescribe and determine.  The Board of Directors or the Executive Committee may from time to time authorize any officer to appoint and remove
agents and

<P>          SECTION 4.3.  <U>Duties of Chairman of the Board.</U>  The Chairman of the Board shall be the chief executive officer of the Company and shall have control and direction of the management and
affairs of the Company and may execute all contracts, deeds, assignments, certificates, bonds or other obligations for and on behalf of the Company, and sign certificates of stock and records of certificates required by law to be signed by the Chairman of
t

<P>          SECTION 4.4.  <U>Duties of President.</U>  Subject to the Control and direction of the Chairman of the Board, and to the control of the Board, the President shall have general management of
all the business of the Company, and he shall have such other powers and perform such other duties as may be prescribed for him by the Board or be delegated to him by the Chairman of the Board.  He shall possess the same power as the Chairman of the Board
to

<P>          SECTION 4.5.  <U>Duties of Vice President.</U>  Each of the Senior Vice Presidents, Executive Vice Presidents, Vice Presidents and Assistant Vice Presidents shall have such powers and duties
as may be prescribed for him by the Board, or be delegated to him by the Chairman of the Board or by the President.  Each of such officers shall possess the same power as the President to sign all certificates, contracts and other instruments of the
Company.

<P>          SECTION 4.6.  <U>Duties of Secretary.</U>  The Secretary shall have the custody and care of the corporate seal, records and minute books of the Company.  He shall attend the meetings of the
Board, of the Executive Committee, and of the shareholders, and duly record and keep the minutes of the proceedings, and file and take charge of all papers and documents belonging to the general files of the Company, and shall have such other powers and
dutie

<P>          SECTION 4.7.  <U>Duties of Treasurer.</U>  The Treasurer shall have charge of, and be responsible for, the collection, receipt, custody and disbursement of the funds of the Company, and shall
deposit its funds in the name of the Company in such banks, trust companies or safety deposit vaults as the Board may direct.  He shall have the custody of the stock record books and such other books and papers as in the practical business operations of
the

<P>          SECTION 4.8.  <U>Duties of Controller.</U>  The Controller shall have control over all accounting records pertaining to moneys, properties, materials and supplies of the Company.  He shall
have Charge of the bookkeeping and accounting records and functions, the related accounting information systems and reports and executive supervision of the system of internal accounting controls, and such other powers and duties as are commonly incident
to th

<P>          SECTION 4.9.  <U>Duties of General Counsel.</U>  The General Counsel shall have full responsibility for all legal advice, counsel and services for the Company and its subsidiaries including
employment and retaining of attorneys and law firms as shall in his discretion be necessary or desirable and shall have such other powers and shall perform such other duties as from time to time may be assigned to him by the Board, the Chairman of the
Board o

<P>          SECTION 4.10.  <U>Duties of Assistant Secretary, Assistant Treasurer, Assistant Controller and Assistant General Counsel.</U>  The Assistant Secretary, Assistant Treasurer, Assistant
Controller and Assistant General Counsel shall assist the Secretary, Treasurer, Controller, and General Counsel, respectively, in the performance of the duties assigned to each and shall for such purpose have the same powers as his principal.  He shall
also have suc

<P><CENTER>ARTICLE V</CENTER></P>
<U><P><CENTER>Indemnification of Directors, Officers, Employees and Agents</CENTER></P></U>
<P>          SECTION 5.1.  <U>Indemnification of Directors, Officers and Employees.</U>  The Company shall indemnify, to the fullest extent permitted under the laws of the State of Illinois and any other
applicable laws, as they now exist or as they may be amended in the future, any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative
or

<P>          SECTION 5.2.  <U>Advancement of Expenses to Directors, Officers and Employees.</U>  Expenses incurred by such a director, officer or employee in defending a civil or criminal action, suit or
proceeding shall be paid by the Company in advance of the final disposition of such action, suit or proceeding to the fullest extent permitted under the laws of the State of Illinois and any other applicable laws, as they now exist or as they may be
amended

<P>          SECTION 5.3.  <U>Indemnification and Advancement of Expenses to Agents.</U>  The board of directors may, by resolution, extend the provisions of this Article V regarding indemnification and
the advancement of expenses to any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding by reason of the fact he or she is or was an agent of the Company or is or was serving
at th

<P>          SECTION 5.4.  <U>Rights Not Exclusive.</U>  The rights provided by or granted under this Article V are not exclusive of any other rights to which those seeking indemnification or advancement
of expenses may be entitled.</P>

<P>          SECTION 5.5.  <U>Continuing Rights.</U>  The indemnification and advancement of expenses provided by or granted under this Article V shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of that person.</P>

<P><CENTER>ARTICLE VI</CENTER></P>
<U><P><CENTER>Certificates of Stock and Their Transfer</CENTER></P></U>
<P>          SECTION 6.1.  <U>Certificates of Stock.</U>  The certificates of stock of the Company shall be in such form as may be determined by the Board of Directors, shall be numbered and shall be
entered in the books of the Company as they are issued.  They shall exhibit the holder's name and number of shares and shall be signed by the Chairman of the Board, the President or a Vice President and also by the Treasurer or an Assistant Treasurer or
the Secr

<P>          SECTION 6.2.  <U>Transfer of Stock.</U>  Upon surrender to the Company of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to
transfer, and upon payment of applicable taxes with respect to such transfer, it shall be the duty of the Company, subject to such rules and regulations as the Board of Directors may from time to time deem advisable concerning the transfer and
registration of

<P>          SECTION 6.3.  <U>Shareholders of Record.</U>  The Company shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof and, accordingly, shall
not be bound to recognize any equitable or other claim to or interest in such share or shares on the part or any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by statute.</P>

<P>          SECTION 6.4.  <U>Lost, Destroyed or Stolen Certificates.</U>  The Board of Directors, in individual cases or by general resolution, may direct a new certificate or certificates to be issued by
the Company as a replacement for a certificate or certificates for a like number of shares alleged to have been lost, destroyed or stolen, upon the making of an affidavit of that fact by the person claiming the certificate or certificates of stock to be loen authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, destroyed or stolen certificate or certificates, or his
legal representative, to give the Company a bond in such form and amount as it may direct as indemnity against any claim that may be made against the Company with respect to the certificate or certificates alleged to have been lost, destroyed or stolen.</P>

<P><CENTER>ARTICLE VII</CENTER></P>
<U><P><CENTER>Miscellaneous</CENTER></P></U>
<P>          SECTION 7.1.  <U>Contracts and Other Instruments.</U>  All contracts or obligations of the Company shall be in writing and shall be signed either by the Chairman of the Board, the President,
or any Vice President and, unless the Board shall otherwise determine and direct, the seal of the Company shall be attached thereto, duly attested by the Secretary or an Assistant Secretary, except contracts entered into in the ordinary course of business
wh

<P>          SECTION 7.2.  <U>Voting Stock Owned by Company.</U>  Any or all shares owned by the Company in any other corporation, and any or all voting trust certificates owned by the Company calling for
or representing shares of stock of any other corporation, may be voted by the Chairman of the Board, the President, any Vice President, the Secretary or the Treasurer, either in person or by written proxy given to any person in the name of the Company at
an

<P><CENTER>ARTICLE VIII</CENTER></P>
<U><P><CENTER>Amendment or Repeal of By-Laws</CENTER></P></U>
<P>          These by-laws may be added to, amended or repealed at any regular or special meeting of the Board by a vote of a majority of the membership of the Board.</P></FONT></BLOCKQUOTE></BODY>
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