<PAGE>




Date:  September 20, 1995                                     Contract No. 24350



                                                                   Exhibit 10(a)

                               FTS -1 SERVICE AGREEMENT

This AGREEMENT is entered into by ANR Pipeline Company

(Transporter) and The Peoples Gas Light and Coke Company (Shipper)

WHEREAS, Shipper has requested Transporter to transport Gas on its behalf and
Transporter represents that it is willing to transport Gas under the terms and
conditions of this Agreement.

NOW, THEREFORE, Transporter and Shipper agree that the terms below, together
with the terms and conditions of Transporter's applicable Rate Schedule and
General Terms and Conditions of Transporter's FERC Gas Tariff constitute the
transportation service to be provided and the rights and obligations of Shipper
and Transporter.

1.  AUTHORITY FOR TRANSPORTATION SERVICE:

    284G -Blanket

2.  RATE SCHEDULE:  FIRM TRANSPORTATION SERVICE (FTS -1)

3.  CONTRACT QUANTITIES:

    Primary Routes -see Exhibit attached hereto.

    Such Contract Quantities shall be reduced for scheduling purposes, but not
    for billing purposes, by the Contract Quantities that Shipper has released
    through Transporter's capacity release program for the period of any
    release.

4.  TERM OF AGREEMENT:

    11/01/1995 to

    10/31/2000

5.  RATES:

    Maximum rates, charges, and fees shall be applicable for the entitlements
    and quantities delivered pursuant to this Agreement unless Transporter has
    advised Shipper in writing or by ANR Xpedite that it has agreed otherwise.

    It is further agreed that Transporter may seek authorization from the
    Commission and/or other appropriate body at any time and from time to time
    to change any rates, charges or other provisions in the applicable Rate
    Schedule and General Terms and


<PAGE>
Date:  September 20, 1995                                     Contract No. 24350

    Conditions of Transporter's FERC Gas Tariff, and Transporter shall have the
    right to place such changes in effect in accordance with the Natural Gas
    Act. This Agreement shall be deemed to include such changes and any changes
    which become effective by operation of law and Commission order.  Nothing
    contained herein shall be construed to deny Shipper any rights it may have
    under the Natural Gas Act, including the right to participate fully in rate
    or other proceedings by intervention or otherwise to contest increased
    rates in whole or in part.

6.   INCORPORATION BY REFERENCE:

    The provisions of Transporter's applicable Rate Schedule and the General
    Terms and Conditions of Transporter's FERC Gas Tariff are specifically
    incorporated herein by reference and made a part hereof.

7.  NOTICES:

    All notices can be given by telephone or other electronic means, however,
    such notice shall be confirmed in writing at the addresses below or through
    ANR Xpedite. Shipper or Transporter may change the addresses below by
    written notice to the other without the necessity of amending this
    agreement:

    TRANSPORTER:

    ANR PIPELINE COMPANY
    500 Renaissance Center
    Detroit, Michigan 48243
    Attentions:    Gas Control (Nominations)
                   Volume Management (Statements)
                   Cash Control (Payments)
                   Marketing Administration (All Other Matters)

    SHIPPER:

    THE PEOPLES GAS LIGHT AND COKE CO.     (Shipper Name)
    -----------------------------------
    130 East Randolph, 22nd Floor          (Address)
    -----------------------------------
    Chicago, IL 60601-6207                 (City, State, Zip)
    -----------------------------------
    Attention:     Eckhard Blaumueller
                   --------------------
    Telephone:     (312)  240-7057
                   --------------------
    Fax:           (312)  240-4211
                   --------------------


                                          2


<PAGE>
Date:  September 20, 1995                                     Contract No. 24350

    INVOICES AND STATEMENTS:

    THE PEOPLES GAS LIGHT AND COKE CO.     (Shipper Name)
    -----------------------------------
    130 East Randolph, 22nd Floor          (Address)
    -----------------------------------
    Chicago, IL 60601-6207                 (City, State, Zip)
    -----------------------------------
    Attention:     Eckhard Blaumueller
                   --------------------
    Telephone:     (312)  240-7057
                   --------------------
    Fax:           (312)  240-4211
                   --------------------


         NOMINATIONS:

    THE PEOPLES GAS LIGHT AND COKE CO.     (Shipper Name)
    -----------------------------------
    130 East Randolph, 22nd Floor          (Address)
    -----------------------------------
    Chicago, IL 60601-6207                (City, State, Zip)
    -----------------------------------
    Attention:     Eckhard Blaumueller
                   --------------------
    Telephone:     (312)  240-7057
                   --------------------
    Fax:           (312)  240-4211
                   --------------------


    Mechanical Dialing
    Device No(s)
                 -----------------------


    ALL OTHER MATTERS:

    THE PEOPLES GAS LIGHT AND COKE CO.     (Shipper Name)
    -----------------------------------
    130 East Randolph, 22nd Floor          (Address)
    -----------------------------------
    Chicago, IL 60601-6207                 (City, State, Zip)
    -----------------------------------
    Attention:     Eckhard Blaumueller
                   --------------------
    Telephone:     (312)  240-7057
                   --------------------
    Fax:           (312)  240-4211
                   --------------------


8.  FURTHER AGREEMENT

    A.   The rate for all quantities of gas transported on the Primary Route(s)
         up to the Primary Route MDQ(s) under this Agreement shall be the
         current FERC Tariff Rates in effect not to exceed $0.15 per dth on a
         100% load factor basis inclusive of Volumetric Buyout/Buydown, GRI,
         Dakota and Transition Costs. In


                                          3


<PAGE>
Date:  September 20, 1995                                     Contract No. 24350

         addition, Shipper will be charged ACA, fuel and any other related fees
         or surcharges.

    B.   All quantities associated with Secondary Receipt Points, Secondary
         Delivery Points, Secondary Routes and the releases of the capacity
         under this Agreement will be at Maximum Tariff Rates plus all other
         related fees, surcharges and fuel.

    C.   Shipper and any Agent of Shipper agree that the rates stated herein
         shall be confidential and shall be maintained confidentially by
         Shipper and any Agent of Shipper. Shipper may disclose such rates only
         if such disclosure is required by law and Shipper requests
         confidential or privileged treatment under applicable statutes, rules
         and regulations, and provides reasonable notice to Transporter prior
         to such disclosure. Any unauthorized disclosure of the rates stated
         herein shall have the effect of terminating from the date the
         discounted rate is disclosed any rate discounts reflected herein such
         that, for the remaining term of this Agreement, Shipper shall be
         required to pay Transporter the maximum applicable rate for service,
         as well as all other charges, surcharges or direct bill applicable to
         such service.

    D.   Shipper waives its right to segment its FTS-1 capacity during the term
         of this Agreement.

    E.   If the FTS-1 Agreement (No. 24400) between Transporter and Shipper is
         terminated after one (1) year of service, this Agreement shall be
         amended to change the Primary Delivery Point to East Joliet only with
         a 100% load factor rate of $0.12 per dth inclusive of Volumetric
         Buyout/Buydown, GRI, Dakota and Transition Costs. In addition, Shipper
         will be charged ACA, fuel and any other related fees or surcharges.

    F.   During the November 1, 1995 to April 30, 1996, October through April
         (1996 -2000) and October 1-31, 2000 periods, Shipper can nominate up
         to 60,000 dth/day from Crystal Falls to either Maumee East/Col Gas OH
         or East Joliet as long as the total combined nomination does not
         exceed 60,000 dth/day.

    G.   Consistent with provisions of its Tariff, Transporter is willing to
         contract on Shipper's behalf for capacity required on third party
         transporters, or for other services to effectuate Shipper's receipt of
         gas on third party facilities and delivery of gas to Transporter's
         facilities.

         Shipper must advise Transporter prior to commencement of such third
         party transportation of its desire to have Transporter act in such a
         capacity.

         Shipper agrees to pay all charges related to such third party
         transportation arrangements pursuant to Transporter's Tariff.


                                          4


<PAGE>
Date:  September 20, 1995                                     Contract No. 24350

    H.   To the extent Shipper desires to utilize receipt/delivery points
         pursuant to Part 284 B (Section 311 of the NGPA and Section 284.102 of
         the Commission's regulations), Shipper must execute a separate
         agreement with Transporter and Shipper must also certify that the
         transportation of gas will be on behalf of either an "intrastate
         pipeline" or a "local distribution company."

9.  OPERATIONAL FLOW ORDERS

    Shipper hereby guarantees to Transporter that each contract it has entered
    into in connection with the Gas to be transported under this Agreement
    contains a provision that permits Transporter to issue an effective
    Operational Flow Order pursuant to Section 8 of the General Terms and
    Conditions. Shipper shall also guarantee for any supply contract for Gas
    that is transported via Viking Gas Transmission Company, that Transporter
    shall be designated a third party beneficiary.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
by their respective Officers or Representatives thereunto duly authorized to be
effective as of the date stated above.




SHIPPER: The Peoples Gas Light and          TRANSPORTER:  ANR Pipeline Company
         Coke Company

By:        /s/ T. M. Patrick           By:         /s/ Linda M. Maiorana
         -------------------------               ---------------------------
Title:   Vice President                Title:    Assistant Vice President
         -------------------------               ---------------------------
Date:    10/04/95                      Date:     10/05/95
         -------------------------               ---------------------------


                                          5
<PAGE>

PRIMARY ROUTE EXHIBIT                   Contract No.        24350
To Agreement Between                    Contract Rate       FTS-1
ANR Pipeline Company (Transporter)      Contract Date       September 20, 1995
and The Peoples Gas Light and Coke      Amendment Date -
Company (Shipper)


<TABLE>
<CAPTION>

 RECEIPT              RECEIPT               DELIVERY             DELIVERY                MDQ
 NUMBER                 NAME                 NUMBER                NAME                 (DTH)         EFFECTIVE PERIOD
---------     ------------------------      ---------     --------------------------    -----       --------------------
<S>           <C>                           <C>           <C>                           <C>         <C>
037000700     Crystal Falls/Fortune Lk      037044750     Maumee East/Col Gas OH (1)    60000       11/01/95 to 04/30/96
                                            032200100     East Joliet

037000700     Crystal Falls/Fortune Lk      032200100     East Joliet                   60000          MAY - SEPTEMBER
                                                                                                        (1996 - 2000)

037000700     Crystal Falls/Fortune Lk      037044750     Maumee East/Col Gas OH (1)    60000          OCTOBER - APRIL
                                            032200100     East Joliet                                   (1996 - 2000)

037000700     Crystal Falls/Fortune Lk      037044750     Maumee East/Col Gas OH (1)    60000     10/01/2000 to 10/31/2000
                                            032200100     East Joliet

</TABLE>

(1)  The Primary Delivery Point of Maumee East/Col Gas OH can be used during the
     months of October through April only; the Primary Delivery Point of East
     Joliet can be used through the term of the Agreement.