***EXHIBIT      10(b)***

***Execution      Draft***

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|   **SEASONAL                CREDIT AGREEMENT** **DATED                AS OF** **October                20, 2006**  **BETWEEN**  **PEOPLES                ENERGY CORPORATION,** **and** **ABN                AMRO BANK N.V.****as                Lender.**   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**TABLE      OF CONTENTS**

| SECTION                  1. DEFINITIONS;                  INTERPRETATION. | 1                                        |
|--------------------------------------------------------------------------------|------------------------------------------|
|                                                                           |  *Section                1.1 * | *Definitions* | 1 |
|                                                                           |  *Section                1.2*       | *Interpretation* | 7 |

|  SECTION 2. THE                REVOLVING CREDIT. | 7                               |
|------------------------------------------------------------|---------------------------------|
|                                                       | *Section                2.1*    | *The                Loan Commitment* | 7 |
|                                                       | *Section                  2.2*  | *[Reserved]* | 7 |
|                                                       | *Section                  2.3*  | *Applicable                  Interest Rates* | 7 |
|                                                       | *Section                  2.5*  | *Minimum                  Borrowing Amounts* | 9 |
|                                                       | *Section                  2.6*  | *Manner                  of Borrowing Loans and Designating Interest Rates Applicable to                  Loans* | 9 |
|                                                       | *Section                  2.8*  | *Interest                  Periods* | 10 |
|                                                       | *Section                  2.9*  | *Maturity                  of Loans* | 11 |
|                                                       | *Section                  2.10* | *Prepayments* | 11 |
|                                                       | *Section                  2.12* | *Default                  Rate* | 11 |
|                                                       | *Section                  2.13* | *Evidence                  of Debt* | 12 |
|                                                       | *Section                  2.14* | *Funding                  Indemnity* | 12 |
|                                                       | *Section                  2.15* | *Revolving                  Credit Commitment Terminations* | 13 |
|                                                       | *Section                  2.16* | *Regulation                  D Compensation* | 13 |
|                                                       | *Section                  2.17* | *Arbitrage                  Compensation* | 13 |

| SECTION 3. FEES. | 13                        |
|-----------------------|--------------------------------|
|                  | *Section                  3.1* | *Fees*. | 13 |

| SECTION                  4. PLACE                  AND APPLICATION OF PAYMENTS. | 14                        |
|--------------------------------------------------------------------------------------|--------------------------------|
|                                                                                 | *Section                  4.1* | *Place                  and Application of Payments* | 14 |

| SECTION                  5. REPRESENTATIONS                  AND WARRANTIES. | 14                        |
|-----------------------------------------------------------------------------------|--------------------------------|
|                                                                              | *Section                  5.1* | *Corporate                  Organization and Authority* | 15 |
|                                                                              | *Section                  5.2* | *Corporate                  Authority and Validity of Obligations* | 15 |
|                                                                              | *Section                  5.3* | *Financial                  Statements* | 15 |
|                                                                              | *Section                  5.4* | *Approvals* | 15 |
|                                                                              | *Section                  5.5* | *ERISA* | 15 |
|                                                                              | *Section                  5.6* | *Government                  Regulation* | 16 |
|                                                                              | *Section                  5.7* | *Margin                  Stock; Proceeds* | 16 |
|                                                                              | *Section                  5.8* | *Full                  Disclosure* | 16 |

| SECTION                  6. CONDITIONS                  PRECEDENT. | 16                             |
|-------------------------------------------------------------------------|--------------------------------|
|                                                                    | *Section                  6.1* | *Initial                  Credit Event* | 16  |
|                                                                    | *Section                  6.2* | *All                  Credit Events* | 17  |

| SECTION                  7. COVENANTS. | 17                        |
|---------------------------------------------|--------------------------------|
|                                        | *Section                  7.1* | *Corporate                  Existence* | 17  |
|                                        | *Section                  7.2* | *ERISA* | 18  |
|                                        | *Section                  7.3* | *Financial                  Reports and Other Information* | 18  |

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|   | *Section                7.5* | *Regulation                U; Proceeds*     | 19  |
|--------|------------------------------|---------------------------------------------|----------|
|   | *Section                7.6* | *Sales                of Assets*            | 19  |
|   | *Section                7.7* | *Capital                Ratio*              | 19  |
|   | *Section                7.8* | *Compliance                with Laws*       | 19  |
|   | *Section                7.9* | *Mergers                and Consolidations* | 19  |

| SECTION                8. EVENTS                OF DEFAULT AND REMEDIES. | 20                      |
|-------------------------------------------------------------------------------|------------------------------|
|                                                                          | *Section                8.1* | *Events                of Default* | 20 |
|                                                                          | *Section                8.2* | *Non-Bankruptcy                Defaults* | 21 |
|                                                                          | *Section                8.3* | *Bankruptcy                Defaults* | 22 |
|                                                                          | *Section                8.4* | *Expenses* | 22 |

| SECTION                9. CHANGE                IN CIRCUMSTANCES. | 22                           |
|------------------------------------------------------------------------|------------------------------|
|                                                                   | *Section                9.1* | *Change                of Law* | 22 |
|                                                                   | *Section                9.2* | *Unavailability                of Deposits or Inability to Ascertain, or Inadequacy of,                LIBOR* | 22 |
|                                                                   | *Section                9.3* | *Increased                Cost and Reduced Return* | 22 |
|                                                                   | *Section                9.5* | *Lending                Offices* | 24 |
|                                                                   | *Section                9.6* | *Discretion                of Lender as to Manner of Funding* | 24 |

| SECTION 10. RESERVED. | 24 |
|----------------------------|----|

| SECTION                  11. MISCELLANEOUS. | 24                               |
|--------------------------------------------------|----------------------------------|
|                                             | *Section                  11.1*  | *Withholding                  Taxes* | 24 |
|                                             | *Section                  11.2*  | *No                  Waiver of Rights* | 25 |
|                                             | *Section                  11.3*  | *Non-Business                  Day* | 25 |
|                                             | *Section                  11.4*  | *Documentary                  Taxes* | 25 |
|                                             | *Section                  11.5*  | *Survival                  of Representations* | 25 |
|                                             | *Section                  11.6*  | *Survival                  of Indemnities* | 25 |
|                                             | *Section                  11.7*  | *Set-Off* | 26 |
|                                             | *Section                  11.8*  | *Notices* | 26 |
|                                             | *Section                  11.9*  | *Counterparts* | 27 |
|                                             | *Section                  11.10* | *Successors                  and Assigns* | 27 |
|                                             | *Section                  11.11* | *[Reserved]*. | 28 |
|                                             | *Section                  11.12* | *Assignments,                  Participations, Etc* | 28 |
|                                             | *Section                  11.13* | *Amendments* | 30 |
|                                             | *Section                  11.14* | *Headings* | 30 |
|                                             | *Section                  11.15* | *Legal                  Fees, Other Costs and Indemnification* | 30 |
|                                             | *Section                  11.16* | *[Reserved]*. | 30 |
|                                             | *Section                  11.17* | *Entire                  Agreement* | 30 |
|                                             | *Section                  11.18* | *Construction* | 30 |
|                                             | *Section                  11.19* | *Governing                  Law* | 30 |
|                                             | *Section                  11.20* | **SUBMISSION                  TO JURISDICTION; WAIVER OF JURY TRIAL** | 30 |
|                                             | *Section                  11.21* | *Confidentiality* | 31 |
|                                             | *Section                  11.22* | *Patriot                  Act* | 31 |

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**CREDIT        AGREEMENT**

**SEASONAL        CREDIT AGREEMENT,**
*Borrower*
*Lender*

**WITNESSETH      THAT:**

**WHEREAS,**
*Revolving        Credit*

**WHEREAS,**

**NOW,      THEREFORE, **

*Section      1.1*
*Definitions*
*.      *

*“Affiliate*
*control*
*controlled        by*
*under        common control with*

*Agreement*

*Applicable        Margin*

*Applicable        Telerate Page*

----

*“Assignment        and Assumption”*

*Authorized        Representative*

*Base        Rate*

*Base        Rate Loan*

*Base        Rate Margin*

*Borrower*

*Borrowing*

*Business        Day*

*Capital*

*Capital        Lease*

*Capital        Ratio*

*Capitalized        Lease Obligations*

*Code*

----

*Commitment        Fee Rate” *

*Compliance        Certificate*

*Consolidated        EBIT*

*Consolidated*
*Net        Worth*

*Contractual        Obligation*

*Controlled        Group*

*Credit        Documents*

*Credit        Event*

*Credit        Rating*

*Default*

*EBIT*

----

*Effective        Date*

*“Eligible        Assignee”*
*provided        *

*ERISA*

*Event        of Default*

*Existing        Credit Agreement*

*Federal        Funds Rate*

*GAAP*

*Guarantee*

*Indebtedness*

----

*Interest        Period*

*Lender*

*Lending        Office*

*LIBOR*

*LIBOR        Loan*

*LIBOR        Margin*

*LIBOR        Reserve Percentage*

*Lien*

*Loan*

*Material        Adverse Effect*

*Non-Recourse        Indebtedness*

*Note*

*Obligations*

----

*Person*

*Plan*

*PBGC*

*Property*

*Reference      Bank*

*Revolving      Credit Commitment*

*SEC*

*Significant      Subsidiary*

*SPC*

*Subsidiary*

*Telerate      Service*

*Termination      Date*

----

*Unfunded        Vested Liabilities*

*Upfront        Fee*

*U.S.        Dollars*
*$*

*Utilization        Fee Rate*

*Welfare        Plan*

*Section      1.2*
*Interpretation*
*.      *

*Section      2.1*
*The      Loan Commitment*
*.      *
*Loan*
*Loans*
**$**
*Revolving      Credit Commitment*
*provided*

*Section      2.2*
*[Reserved]*
*.*

*Section      2.3*
*Applicable      Interest Rates*
*.        *
*Base      Rate Loans*

----

*Base        Rate*

*LIBOR      Loans*

*LIBOR*

*LIBOR        Index Rate*

----

*Applicable        Telerate Page*
*Page        3750*

*LIBOR        Reserve Percentage*
*LIBOR        liabilities*
*LIBOR        liabilities*

*Rate      Determinations*

*Section      2.5*
*Minimum      Borrowing Amounts*
*.      *

*Section      2.6*
*Manner      of Borrowing Loans and Designating Interest Rates Applicable to      Loans*
*.        *
*Notice      to the Lender*

----

*[Reserved]*

*Borrower’s      Failure to Notify*

*Section      2.8*
*Interest      Periods. *
*Interest      Period*
*provided*
*however*

----

*provided*
*however*

*Section      2.9*
*Maturity      of Loans. *

*Section      2.10*
*Prepayments.       *

*Section      2.12*
*Default      Rate. *

----

*Section      2.13*
*Evidence      of Debt. *
*“Note”*

*Section      2.14*
*Funding      Indemnity. *

----

*Section      2.15*
*Revolving      Credit Commitment Terminations. *
*provided*

*Section      2.16*
*Regulation      D Compensation. *

*Section      2.17*
*Arbitrage      Compensation. *
*CP      Rate*
*Arbitrage      Condition*

*Section      3.1*
*Fees*

*Commitment      Fee*

----

*(b)*
*[Reserved].*

*Utilization      Fee*

*Upfront      Fee*
*Upfront      Fee*

*[Reserved]*

*[Reserved]*

*Fee      Calculations*

*Section      4.1*
*Place      and Application of Payments. *

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*Section      5.1*
*Corporate      Organization and Authority. *

*Section      5.2*
*Corporate      Authority and Validity of Obligations. *

*Section      5.3*
*Financial      Statements. *

*Section      5.4*
*Approvals.      *

*Section      5.5*
*ERISA.      *
*ERISA*
*PBGC*

----

*Section      5.6*
*Government      Regulation. *
*investment      company*

*Section      5.7*
*Margin      Stock; Proceeds. *
*margin      stock*

*Section      5.8*
*Full      Disclosure. *

*Section      6.1*
*Initial      Credit Event. *

----

*Section      6.2*
*All      Credit Events. *

*Section        7.1*
*Corporate        Existence. *

----

*Section      7.2*
*ERISA.      *

*Section      7.3*
*Financial      Reports and Other Information. *

----

*Section      7.4*
*Regulation      U; Proceeds. *

*Section      7.5*
*Sales      of Assets*

*Section      7.6*
*Capital      Ratio. *

*Section      7.7*
*Compliance      with Laws. *
*provided*
*however*

*Section      7.8*
*Mergers      and Consolidations. *
*provided,      however*

----

*Section      8.1*
*Events      of Default. *

*provided*

----

*Material      Plan*

*Section      8.2*
*Non-Bankruptcy      Defaults. *

----

*Section      8.3*
*Bankruptcy      Defaults. *

*Section      8.4*
*Expenses.      *

*Section      9.1*
*Change      of Law. *
*provided*
*however*

*Section      9.2*
*Unavailability      of Deposits or Inability to Ascertain, or Inadequacy of, LIBOR..*

*Section      9.3*
*Increased      Cost and Reduced Return.  *

----

----

*provided      however*

*Section      9.5*
*Lending      Offices. *

*Section      9.6*
*Discretion      of Lender as to Manner of Funding. *

*Section      11.1*
*Withholding      Taxes. *

----

*Section      11.2*
*No      Waiver of Rights. *

*Section      11.3*
*Non-Business      Day. *

*Section      11.4*
*Documentary      Taxes. *

*Section      11.5*
*Survival      of Representations. *

*Section      11.6*
*Survival      of Indemnities. *

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*Section      11.7*
*Set-Off.       *

*Section      11.8*
*Notices.       *

| If                to the Borrower:                                                                                                                                                                                                                 |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                               |
| Peoples                Energy Corporation130                East Randolph DriveChicago,                Illinois 60601Attention:                Vice President, FinanceFacsimile:                312.373.4213Telephone:                312.240.3818 |
|                                                                                                                                                                                                                                               |
| If                to the Lender: (Notices related to commitments, covenants or extensions                of                expiry/termination dates)                                                                                               |
|                                                                                                                                                                                                                                               |
| ABN                AMRO Bank N.V.540                W. Madison StreetChicago,                IL 60661-2591Attention:                Kris GrosshansFacsimile:                312 904 1466Telephone:                312 904 7301 (Mr. Grosshans)     |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ABN                AMRO Bank N.V.540                West Madison Street, 26th                FloorChicago,                IL 60661-2591Attn:                Credit AdministrationE-Mail:                melanie.dziobas@abnamro.comFAX: 312-992-5111 ABN                AMRO Bank N.V.4400                Post Oak Parkway, Suite 1500Houston,                TX 77027Attn:                Scott DonaldsonE-Mail:                scott.donaldson@abnamro.comFax:                (832)681-7141 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Borrowing                Requests and notices relating to Loans, Interest and                Fees:                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| ABN                AMRO Bank N.V.540                W. Madison St., 21st                Flr.Chicago,                IL 60661-2591Attn:                Loan AdministrationFacsimile:                (312) 992-5157E-mail:                cpu.team.b@abnamro.comTelephone:                (312) 992-5152                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

*provided        that*

*Section      11.9*
*Counterparts*
*.      *

*Section      11.10*
*Successors      and Assigns*
*.      *

----

*Section      11.11*
*[Reserved]*

*Section      11.12*
*Assignments,      Participations, Etc*
*.*

*Successors        and Assigns Generally *

*Assignments        by Lender. *
*provided*

*(e)*
*Participations.        *
*Participant”*
*provided*

----

*provided*

*Limitations      upon Participant Rights. *

*(g)*
*Certain      Pledges. *
*Certain      Funding Arrangements.  *
*SPC”*

*provided*

----

*Section      11.13*
*Amendments*
*.      *

*Section      11.14*
*Headings*
*.      *

*Section      11.15*
*Legal      Fees, Other Costs and Indemnification*
*.      *

*Section      11.16*
*[Reserved]*

*Section      11.17*
*Entire      Agreement*
*.      *

*Section      11.18*
*Construction*
*.      *

*Section          11.19*
*Governing          Law*
*.          *

*Section 11.20***SUBMISSION      TO JURISDICTION; WAIVER OF JURY TRIAL**
**.       **

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*Section      11.21*
*Confidentiality*
*.      *
*bona      fide*
*provided*
*however*
*bona      fide *

*Section          11.22*
*Patriot          Act*
*.          *

*Balance          of Page Intentionally Left Blank*

*-          Signature Page Follows -*

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|   | **PEOPLES                ENERGY CORPORATION**,                an Illinois corporation, as Borrower |
|--------|----------------------------------------------------------------------------------------------------|
|   |                                                                                               |
|   | By:                 /s/  Douglas M. Ruschau                                              |
|   | Its:                 Vice President & Treasurer                                           |
|   |                                                                                               |
|   |                                                                                               |

|   | **ABN                AMRO BANK N.V**.,                as Lender       |
|--------|-----------------------------------------------------------------------|
|   |                                                                  |
|   | By:                 /s/  Charles F. Randolph                |
|   | Its:                 Managing Director                           |
|   | Title:                 _________________________________________ |
|   |                                                                  |
|   |                                                                  |
|   | By:                 /s/  E. Bennett                         |
|   | Its:                 Director                                    |
|   | Title:                 _________________________________________ |

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**EXHIBIT      A**

**REVOLVING      NOTE**

|  $25,000,000 |                   October 20, 2006 |
|-------------------|----------------------------------------------|

**FOR      VALUE RECEIVED,**
**PEOPLES      ENERGY CORPORATION**
*Borrower*
**ABN      AMRO Bank N.V.**
*Bank*

*prima        facie*

*Credit        Agreement*

|   | **PEOPLES                ENERGY CORPORATION**,                an Illinois corporation |
|--------|---------------------------------------------------------------------------------------|
|   |                                                                                  |
|   | By:                 __________________________________________    |
|   | Its:                 __________________________________________             |

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**EXHIBIT      B**

**COMPLIANCE      CERTIFICATE**

*Credit      Agreement*

|   |
|--------|
|   |
|   |
|   |

|   |   |
|--------|--------|

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**SCHEDULE      1 TO COMPLIANCE CERTIFICATE**

**CALCULATION      AS OF ________ __,200_**

| Capital                Ratio (Sec. 7.6)                                                                       |             |                                                                                            |
|---------------------------------------------------------------------------------------------------------------|------------------|-------------------------------------------------------------------------------------------------|
| 1.                 (a)                consolidated Indebtedness                                          | $      |                                                                                            |
|                     (b) *less*                accumulated other comprehensive income/loss | $__________      |                                                                                            |
|                     (c) net consolidated Indebtedness                                     | $__________      |                                                                                            |
| 2.                 Consolidated                Net Worth                                                 | $      |                                                                                            |
| 3.                 Sum                of Line 1(c) *plus*                Line 2                          | $      |                                                                                            |
| 4.                 Capital                Ratio                                                          |  _____:1.00 | (ratio                of (A) Line 1(c) to (B) Line 3 not to exceed 0.65 to                1.00) |

| The                Peoples Gas Light and Coke Company Peoples                Gas Light Exploration CompanyPeoples                Gas Neighborhood Development CorporationNorth                Shore Gas Company North                Shore Exploration CompanyPeoples                District Energy Corporation Peoples                NGV Corp.  Peoples                Energy Production Company PEP                Holding, LLC Peoples                Energy Canadian Holdings, Inc.Peoples                Energy Production Company of CanadaPeoples                Energy Production Operating CompanyPeoples                Energy Production Partners, L.P.Peoples                Energy Production - Texas, L.P.EnerVest                Energy, L.P. Sierra                1996-I Limited PartnershipPeoples                Energy Resources Company, LLC Peoples                Energy Wholesale Marketing, LLC | PERC                Canada, Inc.Peoples                Natural Gas Liquids, LLCPERC                Holdings, LLC PV                Midstream Ventures, LLC PERC                Power, LLC COB                Energy Facility, LLCPeoples                Calumet, LLCCalumet                Power, LLCPeoples                Elwood, LLCElwood                Energy, LLC Peoples                Elwood Expansion, LLCElwood                Expansion, LLC Valencia                Energy, LLCPeoples                MW, LLC Peoples                Energy Services CorporationPeoples                Energy Ventures, LLC Peoples                Energy Business Services, LLCPeoples                Energy Home Services, LLCPeoples                Energy Neighborhood Development, LLCPeoples                Technology, LLC |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**SCHEDULE      1**

**LENDER’S      PAYMENT INFORMATION**

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**SCHEDULE      1A**

**PRICING      GRID**

**(Basis      Points)**

| **S                & P/ Moody’s Senior Un-Secured Rating** | **A/                A2 or higher** | **A-/                A3** | **BBB+/                Baa1** | **BBB/                Baa2** | **BBB-/                Baa3** | **lower                thanBBB-/ Baa3** |
|----------------------------------------------------------------------|------------------------------------|---------------------------|-------------------------------|------------------------------|-------------------------------|-----------------------------------------|
| **Commitment                Fee**                                    | 6.0                                | 7.0                       | 8.0                           | 10.0                         | 12.5                          | 20.0                                    |
| **Base                Rate Margin**                                  | 0.0                                | 0.0                       | 0.0                           | 0.0                          | 0.0                           | 0.0                                     |
| **LIBOR                Margin**                                      | 25.0                               | 30.0                      | 40.0                          | 50.0                         | 62.5                          | 87.5                                    |
| **Utilization                Fee (>50%)**                         | 10.0                               | 10.0                      | 12.5                          | 12.5                         | 12.5                          | 12.5                                    |

*If      the Borrower is split-rated and the ratings differential is one level, the      higher rating will apply. If the Borrower is split-rated and the ratings      differential is two levels or more, the rating level one below the higher level      will apply. If at any time the Borrower has no Moody’s rating or no Standard& Poors’ rating, the “Lower than BBB-/Baa3” level will apply; provided,      however, that in such event the Borrower may propose an alternative rating      agency or mechanism in replacement thereof.*

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