**Exhibit      12**

**Peoples      Energy Corporation and Subsidiary Companies**

**Statement      Re: Computation of Ratio of Earnings to Fixed Charges**

|                                                                       |   | *Fiscal                years ended September 30,* |    |
|-----------------------------------------------------------------------|--------|---------------------------------------------------|---------|
|                                                                  |   |                                              | *2006*  |   |   | *2005* |   |   | *2004* |   |   | *2003* |   |   | *2002* |   |
|                                                                  |   |                                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                Income (Loss) Before Preferred                     |   |                                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                Dividends, as reported                           |   | $                                                 | (17,636 | ) | $ | 78,133 |   | $ | 81,564 |   | $ | 103,934 |   | $ | 89,071 |   |
|                                                                  |   |                                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Change                in undistributed earnings from equity investees |   |                                              | 4,788   |   |   | (10,150 | ) |   | (8,327 | ) |   | 4,740 |   |   | 12,216 |   |
|                                                                  |   |                                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Add                - Income Taxes                                     |   |                                              | (16,751 | ) |   | 44,704 |   |   | 37,833 |   |   | 59,182 |   |   | 46,321 |   |
| Fixed                charges excluding capitalized interest           |   |                                              | 61,583  |   |   | 50,615 |   |   | 48,426 |   |   | 49,441 |   |   | 56,439 |   |
|                                                                  |   |                                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings                                                              |   | $                                                 | 31,984  |   | $ | 163,302 |   | $ | 159,496 |   | $ | 217,297 |   | $ | 204,047 |   |
|                                                                  |   |                                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed                charges including capitalized interest           |   | $                                                 | 61,583  |   | $ | 50,615 |   | $ | 48,426 |   | $ | 49,441 |   | $ | 56,439 |   |
|                                                                  |   |                                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio                of Earnings to Fixed Charges                     |   |                                              | 0.52    |   |   | 3.23 |   |   | 3.29 |   |   | 4.40 |   |   | 3.62 |   |