Exhibit 10(b)
                                                                 
                                               Contract #: T1105F
                                
                NORTHERN BORDER PIPELINE COMPANY
                 U.S. SHIPPERS SERVICE AGREEMENT

This Agreement (the "Service Agreement") is made and entered into
at Omaha, Nebraska as of    October 27, 1997   , by and between
NORTHERN BORDER PIPELINE COMPANY, hereinafter referred to as
"Company" and THE PEOPLES GAS LIGHT AND COKE COMPANY, an
   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, Enron Capital & Trade Resources Corp. has elected to
permanently release to its Designated Replacement Shipper, The
Peoples Gas Light and Coke Company, a portion of its capacity
under its U.S. Shippers Service Agreement #T1061F dated    August
15, 1997,    as amended; and

WHEREAS, Shipper and Company intend that the Amendment of U.S.
Shippers Service Agreement T1061F will become effective on
   November 1, 1998.

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.


                               -1-
                                                                 
                                                                 
                                               Contract #: T1105F
                                
                NORTHERN BORDER PIPELINE COMPANY
                 U.S. SHIPPERS SERVICE AGREEMENT
                                
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.

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 -






                               -2-
                                                                 
                                                                 
                                               Contract #: T1105F
                                
                NORTHERN BORDER PIPELINE COMPANY
                 U.S. SHIPPERS SERVICE AGREEMENT
                                
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, five (5)  months,
and  one  (1)  day 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:

     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.








                               -3-
                                                                 
                                                                 
                                               Contract #: T1105F
                                
                NORTHERN BORDER PIPELINE COMPANY
                 U.S. SHIPPERS SERVICE AGREEMENT
                                
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.

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




                               -4-

                                                                 
                                                                 
                                               Contract #: T1105F
                                
                NORTHERN BORDER PIPELINE COMPANY
                 U.S. SHIPPERS SERVICE AGREEMENT
                                                    

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.

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.








                               -5-

                                                                 
                                                                 
                                                                 
                                                                 
                                                                 
                                               Contract #: T1105F
                                
                NORTHERN BORDER PIPELINE COMPANY
                 U.S. SHIPPERS 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

 /s/ Thomas W. Harwig     By:   /s/ William E. Morrow
 Assistant Secretary
                          Title:  Vice President











                               -6-
                                               Contract #: T1105F
                                
                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. Raulando C. de Lara

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


                                         Maximum   Minimum    Maximum       
                      Role     Maximum   Receipt  Delivery    Receipt    Minimu
                     (Notes   Quantity  Pressure  Pressure  Temperature    m
      Points        1 and 3)  (MCF/Day)  (PSIG)    (PSIG)      (F)      Temper
                                                                         ature
                                                                          (F)
                                                                            
Ventura, IA            RD      15,000      --        --         --         --
                       TP      15,000      --        --         --         --
                       DD      15,000      --        --         --         --
                                                                            
Grundy Center, IA      RD      15,000      --        --         --         --
(Secondary-Note 2)     TP      15,000      --        --         --         --
                       PD      15,000      --        800        --         32
                       DD      15,000      --        --         --         --
                                                                            
Beaman, IA             RD       5,100      --        --         --         --
(Secondary-Note 2)     TP      15,000      --        --         --         --
                       PD       5,100      --        839        --         32
                       DD       5,100      --        --         --         --
                                                                            
Tama, IA               RD        880       --        --         --         --
(Secondary-Note 2)     TP      15,000      --        --         --         --
                       PD        880       --        816        --         32
                       DD        880       --        --         --         --
                                                                            
Amana, IA              RD      15,000      --        --         --         --
(Secondary-Note 2)     TP      15,000      --        --         --         --
                       PD      15,000      --        783        --         --
                       DD      15,000      --        --         --         --




                               -7-
                                                                 
                                                                 
                                               Contract #: T1105F
                                
                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    Minimu
                     (Notes   Quantity  Pressure  Pressure  Temperature    m
      Points        1 and 3)  (MCF/Day)  (PSIG)    (PSIG)      (F)      Temper
                                                                         ature
                                                                          (F)
                                                                            
Harper, IA             RD      15,000      --        --         --         --
(Secondary-Note 2)     TP      15,000      --        --         --         --
                       PD      15,000      --        712        --         32
                       DD      15,000      --        --         --         --
                                                                            
Iowa City, IA          RD      15,000      --        --         --         --
(Secondary-Note 2)     TP      15,000      --        --         --         --
                       PD      15,000      --        600        --         32
                       DD      15,000      --        --         --         --
                                                                            
Davenport, IA          RD      15,000      --        --         --         --
(Secondary-Note 2)     TP      15,000      --        --         --         --
                       PD      15,000      --        650        --         32
                       DD      15,000      --        --         --         --
                                                                            
Prophetstown, IL       RD      15,000      --        --         --         --
(Secondary-Note 2)     TP      15,000      --        --         --         --
                       PD      15,000      --        600        --         32
                       DD      15,000      --        --         --         --
                                                                            
Troy Grove, IL         RD      15,000      --        --         --         --
(Secondary-Note 2)     TP      15,000      --        --         --         --
                       PD      15,000      --        750        --         32
                       DD      15,000      --        --         --         --
                                                                            
Minooka, IL            RD      15,000      --        --         --         --
(Secondary-Note 2)     TP      15,000      --        --         --         --
                       PD      15,000      --        550        --         32
                       DD      15,000      --        --         --         --
                                                                            
Channahon, IL          RD      15,000      --        --         --         --
(Secondary-Note 2)     TP      15,000      --        --         --         --
                       PD      15,000      --        850        --         32
                       DD      15,000      --        --         --         --
                                                                            
Joliet, IL             RD      15,000      --        --         --         --
(Secondary-Note 2)     TP      15,000      --        --         --         --
                       PD      15,000      --        850        --         32
                       DD      15,000      --        --         --         --



                               -8-
                                                                 
                                                                 
                                               Contract #: T1105F
                                
                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    Mini
                   (Notes   Quantity  Pressure  Pressure  Temperature  mum
     Points       1 and 3)  (MCF/Day)  (PSIG)    (PSIG)      (F)      Temp
                                                                       erat
                                                                       ure
                                                                       (F)
                                                                         
Manhattan, IL        RD      15,000      --        --         --        --
                     TP      15,000      --        --         --        --
                     PD      15,000      --        858        --        32
                     DD      15,000      --        --         --        --
                                                                         
Total Maximum                                                            
Receipt Quantity             15,000                                      
                               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.

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.








                               -9-

                                                                 
                                                                 
                                                Contract # T1105F

                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 October 27,1997. On
the  effective  date designated by the Federal Energy  Regulatory
Commission, it shall supersede the Exhibit A dated as of  -  .

The effective date of this Exhibit A is    October 27, 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

 /s/ Thomas W. Harwig        By:   /s/ William E. Morrow
     Assistant Secretary
                             Title:   Vice President