Registration No. 333-
                                                                        --------

    As filed with the Securities and Exchange Commission on January 7, 2003


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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549
                                    ---------
                                    FORM S-3
                             REGISTRATION STATEMENT
                        UNDER THE SECURITIES ACT OF 1933

SOUTHERN UNION COMPANY                 Delaware                    75-0571592
SOUTHERN UNION FINANCING II            Delaware              Application Pending
SOUTHERN UNION FINANCING III           Delaware              Application Pending
(Exact name of Registrant as   (State or other Jurisdiction   (I.R.S. Employer
 specified in its Charter)    Incorporation or Organization)      Number)

                          One PEI Center, Second Floor
                        Wilkes-Barre, Pennsylvania 18711
                                 (570) 820-2400
    (Address, including zip code, and telephone number, including area code,
               of each registrant's principal executive offices)

                Dennis K. Morgan, Esq.                     With a copy to:
         Executive Vice President-Administration      Stephen A. Bouchard, Esq.
             General Counsel and Secretary          Fleischman and Walsh, L.L.P.
                Southern Union Company              1400 Sixteenth Street, N.W.,
             One PEI Center, Second Floor                     Suite 600
           Wilkes-Barre, Pennsylvania 18711            Washington, D.C. 20036
                     (570) 820-2400                         (202) 939-7911

      (Name, address, including zip code, and telephone number, including
              area code, of agent for service for each registrant)

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          Approximate Date of Commencement of Proposed Sale to Public:
         From time to time after the effective date of the Registration
        Statement, as determined by market conditions and other factors.

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     If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.
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     If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box.    X
                                                     -----

     If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement number of the earlier effective registration
statement for the same offering.
                                  -----

     If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
                       ----

     If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.
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                         CALCULATION OF REGISTRATION FEE
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                                                      Proposed
                                                      maximum
                                                      aggregate
                                      Amount to be    offering       Amount of
Title of each class of securities      registered       price       Registration
         to be registered             (1) (2) (3)     (3) (4)           Fee
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  Debt securities, common stock,
$1.00 par value, and preferred
stock, without par value,
warrants to purchase debt
securities, common stock or
preferred stock, securities
purchase contracts, securities
purchase units and depositary
shares of Southern Union Company
Debt securities and warrants to
purchase debt securities of
Southern Union Company (5)
  Trust preferred securities of
Southern Union Financing II and
Southern Union Financing III (6)
  Guarantees of trust preferred
securities of the Trusts by
Southern Union Company (6)
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               TOTAL                  $800,000,000   $800,000,000  $18,400.00(7)
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(1)  An indeterminate principal amount or number of debt securities, common
     stock, preferred stock, guarantees, warrants to purchase common stock,
     preferred stock and debt securities, stock purchase contracts, stock
     purchase units and depositary shares as may be issued in the event Southern
     Union Company elects to offer fractional interests in preferred stock and
     such indeterminate principal amounts or number of debt securities, common
     stock or preferred stock as may be issued upon conversion of, or in
     exchange for, or upon exercise of, or pursuant to, warrants, or convertible
     or exchangeable debt securities, stock purchase contracts or stock purchase
     units or preferred stock that provides for exercise or conversion into or
     purchase of such securities of Southern Union Company and an indeterminate
     number of trust preferred securities of Southern Union Financing II and
     Southern Union Financing III (the "Trusts") as may from time to time be
     issued at indeterminate prices, with an aggregate offering price not to
     exceed $800,000,000. Debt securities may be issued and sold to the Trusts,
     in which event the debt securities may later be distributed to the holders
     of trust preferred securities.
(2)  In the United States dollars or the equivalent thereof in any other
     currency, composite currency or currency unit as shall result in an
     aggregate initial offering price for all securities of $800,000,000.
(3)  This amount represents the principal amount of any debt securities issued
     at their stated principal amount, the issue price of any debt securities
     issued at a discount from the stated principal amount, the issue price of
     any preferred stock, warrants to purchase common stock, preferred stock and
     debt securities, stock purchase contracts, stock purchase units, depositary
     shares and trust preferred securities and the amount computed pursuant to
     Rule 457(c) for any common stock.
(4)  Estimated solely for the purpose of calculating the registration fee, which
     is calculated in accordance with Rule 457(o) of the rules and regulations
     under the Securities Act of 1933. Rule 457(o) permits the registration fee
     to be calculated on the basis of the maximum offering price of all the
     securities listed and, therefore, the table does not specify by each class
     information as to the amount to be registered, the proposed maximum
     offering price per unit or the proposed maximum aggregate offering price.
(5)  Also includes an indeterminate number of securities that may be issued upon
     exercise, conversion or exchange of or purchase pursuant to any securities
     registered hereunder that provide for conversion or exchange. Exclusive of
     accrued interest and distributions, if any.
(6)  Includes the rights of holders of the trust preferred securities under the
     guarantees of trust preferred securities and back-up undertakings,
     consisting of obligations by Southern Union Company, as set forth in the
     declaration of trust, the applicable indenture and any supplemental
     indenture thereto, in each case, as further described in the registration
     statement. No separate consideration will be received for any guarantees or
     any back-up.
(7)  Pursuant to Rule 429 under the Securities Act of 1933, Southern Union is
     carrying forward $400,000,000 of securities previously registered on its
     Registration Statement on Form S-3, File No. 333-71988, none of which have
     been issued or sold and for which it has paid $100,000 of registration fees
     at the then-effective rate, which are being applied in lieu of $100,000 of
     registration fees due at the present rate for the securities registered by
     this Registration Statement. Southern Union is also carrying forward
     $200,000,000 of securities registered on Form S-3, File No. 333-74696, none
     of which have been issued or sold and for which it has paid $47,800 of
     registration fees due at the then effective rate which are being applied in
     lieu of $47,800 of registration fees due at the present rate for the
     securities registered by this Registration Statement. Therefore, the
     Registration Fee for the current Registration Statement as calculated
     pursuant to Rule 457(o) of the rules and regulations under the Securities
     Act of 1933 is $18,400.00.

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     Pursuant to Rule 429 under the Securities Act of 1933, the prospectus
included in this Registration Statement is a combined prospectus relating also
to securities previously registered pursuant to the Registration Statements on
Forms S-3 (File Nos. 333-71988 and 333-74696) and not issued, which other
Registration Statement, as amended, previously filed by Southern Union Company
has been declared effective. This Registration Statement constitutes Post-
Effective Amendment No. 1 to each of Registration Statement No. 333-71988 and
Registration Statement No. 333-74696 and such Post-Effective Amendments shall
hereafter become effective concurrently with the effectiveness of this
Registration Statement and in accordance with Section 8(c) of the Securities Act
of 1933.

     The registrants hereby amend this registration statement on such date or
dates as may be necessary to delay its effective date until the registrants
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this registration statement shall become
effective on such date as the Securities Exchange Commission, acting pursuant to
said Section 8(a), may determine.


                                      -ii-

<PAGE>
The information in this preliminary prospectus is not complete and may be
changed. We may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This preliminary
prospectus is not an offer to sell these securities and is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.

               SUBJECT TO COMPLETION, DATED January 7, 2003

PRELIMINARY PROSPECTUS

                                  $800,000,000

                             SOUTHERN UNION COMPANY

           Debt Securities, Common Stock, Preferred Stock, Guarantees,
     Warrants to Purchase Debt Securities, Common Stock and Preferred Stock,
 Securities Purchase Contracts, Securities Purchase Units and Depositary Shares

                           SOUTHERN UNION FINANCING II
                          SOUTHERN UNION FINANCING III
         Trust Preferred Securities Guaranteed by Southern Union Company

                                    ---------

         We may offer and sell the securities from time to time in one or more
offerings. This prospectus provides you with a general description of the
securities we may offer.

         Each time we sell securities we will provide a supplement to this
prospectus that contains specific information about the offering and the terms
of the securities. The supplement may also add, update or change information
contained in this prospectus. You should carefully read this prospectus and the
accompanying prospectus supplement before you invest in any of our securities.

Southern Union Company

         Southern Union Company may offer and sell the following securities:

         o     debt securities;
         o     common stock;
         o     preferred stock;
         o     guarantees of trust preferred securities;
         o     warrants to purchase debt securities, common stock and preferred
               stock;
         o     securities purchase contracts and securities purchase units; and
         o     depositary shares.

The Southern Union Company Trusts

         Southern Union Financing II and Southern Union Financing III may offer
and sell trust preferred securities guaranteed by Southern Union Company

         Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.

                 The date of this Prospectus is          , 2002.
                                                ---------

<PAGE>
                              ABOUT THIS PROSPECTUS

         This prospectus is part of a "shelf" registration statement that we
filed with the United States Securities and Exchange Commission or the "SEC." By
using a shelf registration statement, we may sell up to $800,000,000 offering
price of any combination of the securities described in this prospectus from
time to time and in one or more offerings. This prospectus only provides you
with a general description of the securities that we may offer. Each time we
sell securities, we will provide a supplement to this prospectus that contains
specific information about the terms of the securities. The supplement may also
add, update or change information contained in this prospectus. Before
purchasing any securities, you should carefully read both this prospectus and
the accompanying prospectus supplement, together with the additional information
described under the heading "Where You Can Find More Information."

         You should rely only on the information contained or incorporated by
reference in this prospectus and in any supplement. We have not authorized any
other person to provide you with different information. If anyone provides you
with different or inconsistent information, you should not rely on it. You
should assume that the information appearing in this prospectus and the
accompanying prospectus supplement is accurate as of the date on their
respective covers. Our business, financial condition, results of operations and
prospects may have changed since that date.

                           FORWARD-LOOKING STATEMENTS

         We have made statements in this prospectus and the documents that we
incorporate by reference that constitute forward-looking statements that are
based on current expectations, estimates and projections about the industry in
which the Company operates, management's beliefs and assumptions made by
management. Words such as "expects," "anticipates," "intends," "plans,"
"believes," "seeks," "estimates," variations of such words and similar
expressions are intended to identify such forward-looking statements. These
statements are not guarantees of future performance and involve certain risks,
uncertainties and assumptions, which are difficult to predict and many of which
are outside the Company's control. Therefore, actual outcomes and results may
differ materially from what is expressed or forecasted in such forward-looking
statements. The Company undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise. Readers are cautioned not to put undue reliance on such
forward-looking statements. Stockholders may review the Company's reports filed
in the future with the Securities and Exchange Commission for more current
descriptions of developments that could cause actual results to differ
materially from such forward-looking statements.

         Factors that could cause or contribute to actual results differing
materially from such forward-looking statements include the following: cost of
gas; gas sales volumes; weather conditions in the Company's service territories;
the achievement of operating efficiencies and the purchases and implementation
of new technologies for attaining such efficiencies; impact of relations with
labor unions of bargaining-unit employees; the receipt of timely and adequate
rate relief; the outcome of pending and future litigation; governmental
regulations and proceedings affecting or involving the Company; unanticipated
environmental liabilities; changes in business strategy; the risk that the
businesses acquired and any other businesses or investments that Southern Union
has acquired or may acquire may not be successfully integrated with the
businesses of Southern Union; the impairment or sale of investment securities;
and the nature and impact of any extraordinary transactions such as any


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<PAGE>
acquisition or divestiture of a business unit or any assets. These are
representative of the factors that could affect the outcome of the
forward-looking statements. In addition, such statements could be affected by
general industry and market conditions, and general economic conditions,
including interest rate fluctuations, federal, state and local laws and
regulations affecting the retail gas industry or the energy industry generally,
and other factors.

         Other factors that could cause actual results to differ materially from
estimates and projections contained in forward-looking statements are described
in the documents that we incorporate by reference. You should not place undue
reliance on forward-looking statements, which speak only as of the date of this
prospectus, or, in the case of documents incorporated by reference, the date of
those documents.

         All subsequent written and oral forward-looking statements attributable
to us or any person acting on our behalf are expressly qualified in their
entirety by the cautionary statements contained or referred to in this section.
We will not release publicly any revisions to these forward-looking statements
reflecting events or circumstances after the date of this prospectus or
reflecting the occurrence of unanticipated events, unless the securities laws
require us to do so.

                       WHERE YOU CAN FIND MORE INFORMATION

         We have filed a registration statement with the SEC under the
Securities Act of 1933 that registers the securities offered by this prospectus.
The registration statement, including the attached exhibits, contains additional
relevant information about us and the securities being offered. The rules and
regulations of the SEC allow us to omit certain information included in the
registration statement from this prospectus.

         In addition, Southern Union files annual, quarterly and special
reports, proxy statements and other information with the SEC under the
Securities Exchange Act of 1934. You may read and copy this information at, and
you may also obtain copies of this information by mail from, the SEC's Public
Reference Room, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at
prescribed rates. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. The SEC also maintains an Internet world wide web
site that contains reports, proxy statements and other information about
issuers, including Southern Union, who file electronically with the SEC. The
address of that site is http://www.sec.gov. You can also inspect reports, proxy
statements and other information about Southern Union at the offices of The New
York Stock Exchange, Inc., located at 20 Broad Street, New York, New York 10005.

                           INCORPORATION BY REFERENCE

         The SEC allows us to "incorporate by reference" information into this
prospectus. This means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is considered to be part of this document, except for
any information that is superseded by subsequently incorporated documents or by
information that is included directly in this prospectus or any prospectus
supplement.

         We incorporate by reference the documents listed below that Southern
Union has previously filed with the SEC. They contain important information
about Southern Union and its financial condition.


                                      -3-

<PAGE>
            SEC Filings (File No. 1-6407)                      Date Filed
-----------------------------------------------------   ------------------------
Annual Report on Form 10-K for the fiscal year ended
June 30, 2002                                              September 27, 2002

Proxy Statement Relating to the Annual Meeting of
Shareholders to be held November 5, 2002                   October 7, 2002

Current Report on Form 8-K                                 October 30, 2002

Quarterly Report on Form 10-Q for the period ended
September 30, 2002                                         November 14, 2002

Current Report on Form 8-K                                 January 2, 2003

         We are also incorporating by reference additional documents that we may
file with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 between the date of this prospectus until the
termination of the offering of the securities offered by this prospectus. These
documents include periodic reports, including Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as proxy
statements.

         You can obtain any of the documents incorporated by reference in this
document through us or from the SEC through the SEC's web site at the address
provided above. Documents incorporated by reference are available from us
without charge, excluding any exhibits to those documents unless the exhibits
are specifically incorporated by reference in such document. You can obtain
documents incorporated by reference in this document by requesting them in
writing or by telephone from us at the following address:

                         Attention: Richard N. Marshall
                  Director of Investor Relations and Treasurer
                             Southern Union Company
                                 One PEI Center
                        Wilkes-Barre, Pennsylvania 18711
                          Telephone No.: (570) 829-8600

         Separate financial statements of the trusts have not been included in
this prospectus. Southern Union and the trusts do not consider such financial
statements to be helpful because:

         o    Southern Union beneficially owns directly or indirectly all of the
              undivided beneficial interests in the assets of the trusts (other
              than the beneficial interests represented by any trust preferred
              securities issued and sold). See "The Trusts," "Description of
              Securities - Trust Preferred Securities" and "Trust Guarantees."

         o    Southern Union will guarantee the trust preferred securities such
              that the holders of the trust preferred securities, with respect
              to the payment of distributions and amounts upon liquidation,
              dissolution and winding-up, are in the same position with regard
              to assets of Southern Union as a holder of the subordinated debt
              securities to be issued by Southern Union.

         o    In future filings under the Securities Exchange Act of 1934, an
              audited footnote to Southern Union's annual financial statements
              will state that all common securities issued by the trusts are
              owned by Southern Union, that the sole assets of the trusts are
              the subordinated debt securities of Southern Union having a
              specified total principal amount and that, considered together,


                                      -4-

<PAGE>
              Southern Union's obligations under the subordinated debt
              securities and the related agreements, including the guarantees,
              constitute a full and unconditional guarantee by Southern Union of
              the trusts' obligations under the trust preferred securities.

         o    Each trust is a special purpose entity, has not engaged in any
              activity since its creation, has no independent operations and is
              not engaged in, and does not propose to engage in, any activity
              other than as described under "The Trusts."


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<PAGE>
                             SOUTHERN UNION COMPANY

         Southern Union's principal line of business is the distribution of
natural gas as a public utility in Missouri, Pennsylvania, Rhode Island and
Massachusetts. Southern Union's principal operating divisions are:

         o    Missouri Gas Energy, headquartered in Kansas City, Missouri,
              serving approximately 498,000 customers in central and western
              Missouri (including Kansas City, St. Joseph, Joplin and Monett);

         o    PG Energy, headquartered in Wilkes-Barre, Pennsylvania, serving
              approximately 157,000 customers in northeastern and central
              Pennsylvania (including Wilkes-Barre, Scranton and Williamsport);
              and

         o    New England Gas Company, headquartered in Providence, Rhode
              Island, serving approximately 295,000 customers in Rhode Island
              and Massachusetts (including Providence, Newport and Cumberland,
              Rhode Island and Fall River, North Attleboro and Somerset,
              Massachusetts).

         Previously, Southern Union's utility operations included Southern Union
Gas, headquartered in Austin, Texas, which served approximately 535,000
customers in Texas (including Austin, Brownsville, El Paso, Galveston,
Harlingen, McAllen and Port Arthur).  On October 16, 2002, Southern Union
entered into a definitive agreement with ONEOK, Inc. ("ONEOK"), of Tulsa,
Oklahoma, to sell Southern Union Gas Company, its Texas division, and related
assets to ONEOK for approximately $420 million in cash.  After receiving
necessary consents and approvals, this transaction closed effective January 1,
2003.

         The diverse geographic area of Southern Union's natural gas utility
distribution systems should reduce the overall sensitivity of Southern Union's
operations to weather risk and local economic conditions.

         Southern Union and its subsidiaries seek to support and expand their
natural gas and other energy sales and capitalize on their energy expertise.
Southern Union subsidiaries operate or manage natural gas pipeline systems and
generate electricity. Central to all of Southern Union's present businesses and
strategies is the distribution and transportation of natural gas.  The Company
recently entered into agreements involving two interstate natural gas pipeline
companies:

         o    On December 21, 2002, Southern Union entered into agreements with
              respect to the purchase of the Panhandle Eastern Pipe Line Company
              from a subsidiary of CMS Energy Corporation for approximately $1.8
              billion, which includes $1.166 billion in gross Panhandle debt.
              The transactions are expected to close by Spring 2003 following
              clearance by the Federal Trade Commission under the
              Hart-Scott-Rodino Act and certain state regulatory approvals.
              Panhandle is primarily engaged in the interstate transmission and
              storage of natural gas, and operates a large natural gas pipeline
              network in the Mid-Continent.

         o    On November 20, 2002, Energy Worx, Inc., a wholly-owned
              subsidiary of the Company, entered into a Management Services
              Agreement with Southern Star Central Corp. whereby Energy Worx
              agreed to provide management services with respect to the
              interstate natural gas pipeline business conducted by Southern
              Star Central and its subsidiaries, which subsidiaries presently
              include Southern Star Central Gas Pipeline, Inc. (formerly known
              as Williams Central Gas Pipeline, Inc.) and Western Frontier
              Pipeline Company which were purchased by Southern Star Central
              from Williams Gas Pipeline Company, LLC on November 15, 2002.

         Southern Union is a sales and market-driven energy company whose
management is committed to achieving profitable growth in an increasingly
competitive business environment. Southern Union's strategies for achieving
these objectives principally consist of:

         o    promoting new sales opportunities and markets for natural gas;

         o    enhancing financial and operating performance;

         o    expanding Southern Union through development of existing utility
              businesses and possibly by acquiring selective new utility
              distribution companies, regulated interstate pipeline businesses
              and other energy service business;

         o    selectively investing in complementary businesses; and

         o    partnering with companies which complement Southern Union's
              existing customer service and core utility business or provide
              equity funding.

         Southern Union's management develops and continually evaluates these
strategies and their implementation by applying its experience and expertise in
analyzing the energy industry, technological advances, market opportunities and
general business trends. Each of these strategies, as implemented throughout


                                      -6-

<PAGE>
Southern Union's existing businesses, reflects its commitment to enhancing
shareholder value.

         Southern Union's corporate headquarters are located at One PEI Center,
Second Floor, Wilkes-Barre, Pennsylvania 18711, where its telephone number is
(570) 820-2400.

                                   THE TRUSTS

         Southern Union Financing II and Southern Union Financing III are each a
statutory business trust created under Delaware law through the execution of a
trust agreement and the filing of a certificate of trust with the Delaware
Secretary of State on March 28, 1995. At the time of public issuance of trust
preferred securities by a trust, the related trust agreement will be amended and
restated in its entirety substantially in the form filed as an exhibit to the
registration statement which includes this prospectus. The amended and restated
trust agreement is referred to as the "trust agreement." Each trust agreement
will be qualified as an indenture under the Trust Indenture Act of 1939. Each
trust exists for the exclusive purposes of:

         o    issuing and selling to the public the trust preferred securities,
              representing undivided beneficial interests in the assets of the
              trust;

         o    issuing and selling to Southern Union common securities,
              representing undivided beneficial interests in the assets of the
              trust;

         o    investing the gross proceeds from the sale of the trust preferred
              securities and the common securities in subordinated debt
              securities issued by Southern Union;

         o    distributing the cash payments it receives from the subordinated
              debt securities owned by it to the holders of the trust preferred
              securities and the common securities; and

         o    engaging in those other activities necessary or incidental to
              these purposes.

         Each trust has a term of approximately 55 years from formation, but may
terminate earlier as provided in the trust agreement.

         The proceeds from the offering and the sale of the common securities
and the trust preferred securities will be used by each trust to purchase from
Southern Union subordinated debt securities in a total principal amount equal to
the total liquidation preference of the common securities and the trust
preferred securities. The subordinated debt securities will bear interest at an
annual rate equal to the annual distribution rate of the common securities and
the trust preferred securities and will have certain redemption terms which
correspond to the redemption terms for the common securities and the trust
preferred securities. The subordinated debt securities will rank subordinate in
right of payment to all of Southern Union's senior indebtedness (as defined
herein). Distributions on the common securities and the trust preferred
securities issued by a trust may not be made unless the trust receives
corresponding interest payments from Southern Union on the subordinated debt
securities held by it. Southern Union will irrevocably guarantee, on a
subordinated basis and to the extent set forth in the guarantee, with respect to
each of the common securities and the trust preferred securities, the payment of
distributions, the redemption price, including all accrued or deferred and
unpaid distributions, and payment on liquidation, but only to the extent of
funds on hand at the trust. Each guarantee will be unsecured and will be
subordinate to all senior indebtedness of Southern Union. Upon the occurrence of
certain events (subject to the conditions to be described in an accompanying


                                      -7-
<PAGE>
prospectus supplement), each trust may be liquidated and the holders of the
common securities and trust preferred securities could receive subordinated debt
securities in lieu of any liquidating cash distribution.

         All of the trust common securities will be owned by Southern Union.
Southern Union will, directly or indirectly, in connection with an offering of
trust preferred securities by a trust, purchase common securities of the trust
in an aggregate liquidation amount equal to 3% of the total capital of the
trust.

         Each trust initially will have four trustees. Two of the trustees will
be persons who are employees or officers of or who are affiliated with Southern
Union and will be referred to as the administrative trustees. The third trustee
will be a financial institution that is unaffiliated with Southern Union, which
trustee will serve as property trustee under the applicable trust agreement and
as indenture trustee for the purpose of compliance with the provisions of the
Trust Indenture Act of 1939. Wilmington Trust Company will be the property
trustee until removed or replaced by the holder of the common securities.
Wilmington Trust Company will also act as the Delaware trustee, the fourth
trustee, for the purposes of the Delaware Business Trust Act, until removed or
replaced by the holder of the common securities. Wilmington Trust Company will
also act as guarantee trustee under each trust guarantee. See "Description of
the Trust Guarantees."

         The property trustee will hold title to the subordinated debt
securities for the benefit of the holders of the common securities and the trust
preferred securities. The property trustee will have the power to exercise all
rights, powers and privileges under the applicable indenture as the holder of
the subordinated debt securities. In addition, the property trustee will
maintain exclusive control of a segregated non-interest bearing bank account to
hold all payments made in respect of the subordinated debt securities for the
benefit of the holders of the common securities and the trust preferred
securities. The property trustee will make payments of the distributions and
payments on liquidation, redemption and otherwise to the holders of the common
securities and the trust preferred securities out of funds from the segregated
non-interest bearing bank account. The guarantee trustee will hold the
guarantees for the benefit of the holders of the common securities and the trust
preferred securities.

         Southern Union, as the holder of all the common securities, will have
the right to appoint, remove or replace any of the trustees. Southern Union will
also have the right to increase or decrease the number of trustees, as long as
the number of trustees shall be at least three, a majority of which shall be
administrative trustees. Southern Union will pay all fees and expenses related
to the trusts and the offering of the common securities and the trust preferred
securities.

         The rights of the holders of the trust preferred securities, including
economic rights, rights to information and voting rights, are set forth in the
applicable trust agreement, the Delaware Business Trust Act and the Trust
Indenture Act of 1939.

         The office of the Delaware trustee for each trust is Wilmington Trust
Company, Rodney Square North, 1100 North Market Street, Wilmington, Delaware
19890. The address for each trust is c/o Southern Union Company, One PEI Center,
Second Floor, Wilkes-Barre, Pennsylvania 18711, telephone (570) 820-2400.

                                 USE OF PROCEEDS

         The net proceeds received by Southern Union from the issuance of the
offered securities will be used for general corporate purposes, including:


                                      -8-

<PAGE>
         o    repurchases of outstanding long-term debt securities and
              redemptions of other outstanding trust preferred securities and
              guarantees;

         o    repayment of other borrowings, including short-term borrowings
              under bank credit agreements; and

         o    as otherwise disclosed in any supplement to this prospectus.

         The proceeds received by each of the trusts from the sale of its trust
preferred securities and common securities will be invested in subordinated debt
securities issued by Southern Union and Southern Union in turn will use the
proceeds from the issuance of subordinated debt securities for the purposes
stated above.

         The prospectus supplement for a particular offering will provide a more
detailed description of the use of the net proceeds from such offering. Southern
Union may invest any funds it does not require immediately in marketable
securities and short-term investments.


                                      -9-

<PAGE>
                       RATIO OF EARNINGS TO FIXED CHARGES

         The following table sets forth the ratio of earnings to fixed charges
on an historical basis for each of the five years in the period ended June 30,
2002, and for the three-month period ended September 30, 2002. For the purpose
of calculating such ratios, "earnings" consist of income from continuing
operations before income taxes and fixed charges. "Fixed charges" consist of
interest expense, amortization of debt discount or premium and an estimate of
interest implicit in rentals.

                                                   Year Ended June 30,
                                         ---------------------------------------
                   Three Months Ended
                   September 30, 2002    2002    2001     2000     1999     1998
                   ------------------    ----    ----     ----     ----     ----

Ratio of Earnings
  to Fixed Charges          --*          1.32    1.81     1.29     1.36     1.42

*The earnings were inadequate to cover fixed charges by approximately $10.4
million for the three-month period ended September 30, 2002.  Due to the
seasonal nature of the gas utility business, the three-month period ending
September 30 is typically a loss period.


                                      -10-

<PAGE>
                            DESCRIPTION OF SECURITIES

         The following is a general description of the terms and provisions of
the securities we may offer and sell by this prospectus. These summaries are not
meant to be a complete description of each security. This prospectus and any
accompanying prospectus supplement will contain the material terms and
conditions for each security. The accompanying prospectus supplement may add,
update or change the terms and conditions of the securities as described in this
prospectus. For more information about the securities offered by us, please
refer to:

         o    the indenture between Southern Union and JP Morgan Chase Bank, as
              trustee, relating to the issuance of each series of senior debt
              securities by Southern Union (the "senior indenture");

         o    the indenture between Southern Union and JP Morgan Chase Bank, as
              trustee, relating to the issuance of each series of subordinated
              debt securities by Southern Union (the "subordinated indenture");

         o    the Declaration of each trust; and

         o    Southern Union's guarantee of the trust preferred securities
              issued by each trust.

         Forms of these documents are filed as exhibits to the registration
statement. The indentures listed above are sometimes collectively referred to as
the "indentures" and individually referred to as an "indenture." The indentures
are subject to and governed by the Trust Indenture Act of 1939, as amended, and
may be supplemented or amended from time to time following their execution.

                         DESCRIPTION OF DEBT SECURITIES

         Unless indicated differently in a prospectus supplement, the following
description sets forth the general terms and provisions of the debt securities
that Southern Union may offer by this prospectus. The debt securities may be
issued as either senior debt securities or subordinated debt securities.

         The senior debt securities will be governed by the senior indenture and
the subordinated debt securities will be governed by the subordinated indenture.
Each indenture gives the issuer broad authority to set the particular terms of
each series of debt securities, including the right to modify certain of the
terms contained in the indenture. The particular terms of a series of debt
securities and the extent, if any, to which the particular terms of the issue
modify the terms of the applicable indenture will be described in the
accompanying prospectus supplement relating to such series of debt securities.

         Each indenture contains the full legal text of the matters described in
this section. Because this section is a summary, it does not describe every
aspect of the debt securities or the applicable indenture. This summary is
subject to and qualified in its entirety by reference to all the provisions of
the applicable indenture, including definitions of terms used in such indenture.
Whenever we refer to defined terms of the indentures in this prospectus or in a
prospectus supplement, these sections or defined terms are incorporated by
reference into this prospectus or into the prospectus supplement. This summary
also is subject to and qualified by reference to the description of the
particular terms of a particular series of debt securities described in the
applicable prospectus supplement or supplements. Keep in mind that it is the
indentures and not this summary that defines your rights. There may be other
provisions which also are important to you. Each indenture is filed as an


                                      -11-

<PAGE>
exhibit to the registration statement that includes this prospectus. See "Where
You Can Find More Information" for information on how to obtain a copy of the
indentures.

General

         Southern Union may issue an unlimited amount of debt securities under
the indentures in one or more series. The Company is not required to issue all
debt securities of one series at the same time and, unless otherwise provided in
a prospectus supplement, may reopen a series, without the consent of the holders
of the debt securities of that series, for issuances of additional debt
securities of that series. The debt securities of Southern Union will be
unsecured obligations of the Company.

         Prior to the issuance of each series of debt securities, the terms of
the particular securities will be specified in either a supplemental indenture
(including any pricing supplement) and a board resolution of Southern Union or
in one or more officers' certificates of Southern Union pursuant to a
supplemental indenture or a board resolution, both of which will be made
publicly available in a filing we will make with the SEC with respect to any
offering of debt securities. We refer you to the applicable prospectus
supplement for a description of the following terms of each series of debt
securities:

         o    the title and type of the debt securities;

         o    the total principal amount of the debt securities and the
              currency, if other than U.S.  dollars, in which such notes are
              denominated;

         o    the percentage of the principal amount at which the debt
              securities will be issued and any payments due if the maturity of
              the debt securities is accelerated;

         o    the dates on which the principal of the debt securities will be
              payable and the terms on which any such maturity date may be
              extended;

         o    the interest rate which the debt securities will bear and the
              interest payment dates for the debt securities - any optional
              redemption periods;

         o    any sinking fund or other provisions that would obligate us to
              repurchase or otherwise redeem some or all of the debt securities;

         o    any changes to or additional events of default or covenants;

         o    any special tax implications of the debt securities, including
              provisions for original issue discount securities, if offered;

         o    any conversion privileges, and the terms and conditions of such
              conversion, including provision for adjustments of the conversion
              rate in such events as the Board of Directors shall determine;

         o    restrictions on the declaration of dividends on our capital stock
              (other than dividends in such stock) or requiring the maintenance
              of any asset ratio or the creation or maintenance of reserves; and

         o    any other terms of the debt securities.

Ranking

         The senior debt securities will be our unsecured and unsubordinated
obligations. The indebtedness represented by the senior debt securities will
rank equally with all our other unsecured and unsubordinated debt, except that
the senior debt securities will be senior in right of payment to any
subordinated indebtedness which states in its terms that it is subordinate to
the senior debt securities. We have outstanding debt securities which are


                                      -12-

<PAGE>
secured by mortgages on assets in our PG Energy and New England divisions. As a
result, those securities have priority with respect to those mortgaged assets.
The indebtedness represented by the subordinated debt securities will rank
junior and subordinate in right of payment to our prior payment in full of our
senior debt, to the extent and in the manner set forth under the caption
"--Subordination" below and as may be set forth in a prospectus supplement from
time to time. The debt securities are obligations of Southern Union exclusively,
and are not the obligations of any of our subsidiaries.

Denominations

         The prospectus supplement for each issuance of debt securities will
state whether the securities will be issued in registered form of $1,000 each or
multiples of $1,000 or such lesser amount as may be indicated in a prospectus
supplement for a specific series of debt securities, or bearer form of $5,000
each, or global form.

Covenants

         Under the indentures, we will:

         o    pay the principal of, and interest and any premium on, the debt
              securities when due;

         o    maintain a place of payment;

         o    deliver a report to the trustee at the end of each fiscal year
              reviewing our obligations under the indenture; and

         o    deposit sufficient funds with any paying agent on or before the
              due date for any principal, interest or premium.

Consolidations, Mergers and Sales

         The indenture provides that we will not consolidate with or merge with
or into any other entity, or convey, transfer or lease, or permit one or more of
our subsidiaries to convey, transfer or lease, all or substantially all of our
properties and assets on a consolidated basis to any entity, unless:

         o    either we are the continuing corporation or such corporation or
              entity assumes by supplemental indenture all of our obligations
              under the debt securities and their respective indentures;

         o    no default or event of default is existing immediately after the
              transaction; and

         o    the surviving entity is a corporation, partnership or trust
              organized and validly existing under the laws of the United States
              of America, any state of the United States or the District of
              Columbia.

Liens

         Pursuant to the indenture, we will not, and we will not permit any
subsidiary to, create, incur, issue or assume any debt secured by any lien on
any property or assets owned by us or any of our subsidiaries, and we will not
permit any of our subsidiaries to, create, incur, issue or assume any debt
secured by any lien on any shares of stock or debt of any subsidiary (such
shares of stock or debt of any subsidiary being called "restricted securities"),
unless


                                      -13-

<PAGE>
         o    in the case of new debt which is expressly by its terms
              subordinate or junior in right of payment to the applicable series
              of debt securities, the applicable series of debt securities are
              secured by a lien on such property or assets that is senior to the
              new lien with the same relative priority as such subordinated debt
              has with respect to the applicable series of debt securities; or

         o    in the case of liens securing new debt that is ranked equally with
              the applicable series of debt securities, the applicable series of
              debt securities are secured by a lien on such property or assets
              that is equal and ratable with the new lien, except that any lien
              securing such debt securities may be junior to any lien on our
              accounts receivable, inventory and related contract rights
              securing debt under our revolving credit facility.

These restrictions do not prohibit Southern Union from creating any of the
following liens:

         (1)      any liens on any of our property, assets or restricted
                  securities or those of any subsidiary existing as of the date
                  of the first issuance by us of the debt securities issued
                  pursuant to the indenture, or such other date as may be
                  specified in a prospectus supplement for an applicable series
                  of debt securities issued pursuant to the indenture, subject
                  to the provisions of subsection (8) below;

         (2)      liens on any property or assets or restricted securities of
                  any corporation existing at the time such corporation becomes
                  a subsidiary, or arising after such time (a) otherwise than in
                  connection with the borrowing of money arranged after the
                  corporation became a subsidiary and (b) pursuant to
                  contractual commitments entered into prior to and not in
                  contemplation of such corporation becoming a subsidiary;

         (3)      liens on any of our property, assets or restricted securities
                  or those of any subsidiary existing at the time of acquisition
                  of such property, assets or securing the payment of all or any
                  part of the purchase price or construction cost of such
                  property, assets or restricted securities, or securing any
                  debt incurred prior to, at the time of or within 120 days
                  after the later of the date of the acquisition of such
                  property, assets or restricted securities or the completion of
                  any such construction, for the purpose of financing all or any
                  part of the purchase price or construction cost;

         (4)      liens on any property or assets to secure all or any part of
                  the cost of development, operation, construction, alteration,
                  repair or improvement of all or any part of such property or
                  assets or to secure debt incurred by us or any of our
                  subsidiaries prior to, at the time of or within 120 days
                  after, the completion of such development, operation,
                  construction, alteration, repair or improvement, whichever is
                  later, for the purpose of financing all or any related costs;

         (5)      liens in favor of the trustee for the benefit of the holders
                  and subsequent holders of the debt securities securing the
                  debt securities;

         (6)      liens secured by any of our property or assets or those of any
                  subsidiary that comprise no more than 20% of Consolidated Net
                  Tangible Assets (as defined under "Terms Described in the
                  Indenture" below);


                                      -14-

<PAGE>
         (7)      liens which secure senior indebtedness owing by a subsidiary
                  to us or to another subsidiary; and

         (8)      any extension, renewal, substitution or replacement in whole
                  or in part, of any of the liens referred to above or the debt
                  secured by the liens; provided that:

                  (a)      such extension, renewal, substitution or replacement
                           lien will be limited to all or any part of the same
                           property, assets or restricted securities that
                           secured the prior lien plus improvements on such
                           property and plus any other property or assets not
                           then owned by us or one of our subsidiaries or
                           constituting restricted securities; and

                  (b)      in the case of items (1) through (3) above, the debt
                           secured by such lien at such time is not increased.

If we give a guarantee that is secured by a lien on any property or assets or
restricted securities, or we create a lien on any property or assets or
restricted securities to secure debt that existed prior to the creation of such
lien, the indenture will deem that we have created debt in an amount equal to
the principal amount guaranteed or secured by such lien. The amount of debt
secured by liens on property, assets and restricted securities will be computed
without cumulating the indebtedness with any guarantee or lien securing the same
indebtedness.

Limitation on Sale and Leaseback Transactions

         The indentures also provide that we will not, nor will we permit any of
our subsidiaries to, engage in a sale-leaseback transaction, unless:

         (1)      the sale-leaseback transaction involves a lease for a period,
                  including renewals, of not more than three years;

         (2)      we or any of our subsidiaries, within 180 days after such
                  sale-leaseback transaction, apply or cause to be applied an
                  amount not less than the net sale proceeds from such
                  sale-leaseback transaction to the repayment, redemption or
                  retirement of our funded debt or funded debt of any such
                  subsidiary; or

         (3)      the Attributable Debt (as defined below under "Terms Described
                  in the Indenture") from such sale-easeback transaction,
                  together with all other sale and leaseback transactions
                  entered into after the date of the first issuance by us of
                  debt securities pursuant to the indenture other than
                  sale-leaseback transactions permitted by clauses (1) and (2)
                  above does not exceed 20% of our Consolidated Net Tangible
                  Assets (as defined below under "Terms Described in the
                  Indenture" below).

Events of Default

         The indentures provide that any one of the following events is an event
of default:

         o    failure to pay any interest or any additional amounts due on any
              debt security, or of any coupon, for 30 days;


                                      -15-

<PAGE>
         o    failure to pay the principal of or any premium on any debt
              security when due, whether at maturity, upon redemption, by
              declaration or otherwise;

         o    failure to perform any other covenant or agreement in the
              indenture which continues for 60 days after written notice is
              given to us by the trustee or the holders of at least 25% of
              the outstanding debt securities of that series;

         o    cross-acceleration of our other debt in excess of 10% of our
              consolidated net worth;

         o    events in any bankruptcy, insolvency or reorganization of our
              company;

         o    any other event of default listed in the indenture for debt
              securities of that series.

         We are required to file annually with the trustee an officer's
certificate as to our compliance with all conditions and covenants under the
indenture. The indenture permits the trustee to withhold notice to the holders
of debt securities of any default, except in the case of a failure to pay the
principal of (or premium, if any), or interest on, any debt securities or the
payment of any sinking fund installment with respect to such securities, if the
trustee considers it in the interest of the holders of debt securities to do so.

         If an event of default, other than events with respect to our
bankruptcy, insolvency and reorganization or that of any of our significant
subsidiaries, occurs and is continuing with respect to debt securities, the
trustee or the holders of at least 25% in principal amount of outstanding debt
securities of that series may declare the outstanding debt securities of that
series due and payable immediately. If our bankruptcy, insolvency or
reorganization, or that of any of our significant subsidiaries, causes an event
of default for debt securities of a particular series, then the principal of all
the outstanding debt securities of that series, and accrued and unpaid interest
thereon, will automatically be due and payable without any act on the part of
the trustee or any holder.

         If an event of default with respect to debt securities of a particular
series occurs and is continuing, the trustee will be under no obligation to
exercise any of its rights or powers under the indenture at the request or
direction of any of the holders of debt securities of such series (other than
duties listed in the indenture), unless such holders offer to the trustee
reasonable indemnity and security against the costs, expenses and liabilities
that might be incurred by the trustee to comply with the holders' request. If
they provide this indemnity to the trustee, the holders of a majority in
principal amount of the outstanding debt securities of such series will have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the trustee under the indenture, or exercising any trust or
power given to the trustee with respect to the debt securities of that series.
The trustee may refuse to follow directions in conflict with law or the
indenture that may subject the trustee to personal liability or may be unduly
prejudicial to holders not joining in such directions.

         The holders of not less than a majority in principal amount of the
outstanding debt securities of any series may, on behalf of the holders of all
the debt securities of such series and any related coupons, waive any past
default under the indenture with respect to such series and its consequences,
except a default:

         o    in the payment of the principal of (or premium, if any) or
              interest on or additional amounts payable in respect of any debt
              security of such series unless such default has been cured and a
              sum sufficient to pay all matured installments of interest and
              principal due otherwise than by acceleration and any applicable
              premium has been deposited with the trustee; or

                                      -16-
<PAGE>
         o    in respect of a covenant or provision that cannot be modified or
              amended without the consent of the holder of each outstanding debt
              security of such series affected by the modification or amendment.

Modification or Waiver

         We and the trustees may modify and amend the indentures with the
consent of the holders of not less than a majority in principal amount of all
outstanding indenture securities or any series that is affected by such
modification or amendment. The consent of the holder of each outstanding debt
security of a series is required in order to:

         o    change the stated maturity of the principal of (or premium, if
              any), or any installment of principal or interest on any debt
              security of such series;

         o    reduce the principal amount or the rate of interest on or any
              additional amounts payable, or any premium payable upon the
              redemption of such series;

         o    change our obligation to pay additional amounts in respect of any
              debt security of such series;

         o    reduce the amount of principal of a debt security that is an
              original issue discount security and would be due and payable upon
              a declaration of acceleration of the maturity of that debt
              security;

         o    adversely affect any right of repayment at the option of the
              holder of any debt security of such series;

         o    change the place or currency of payment of principal of, or any
              premium or interest on, any debt security of such series;

         o    impair the right to institute suit for the enforcement of any such
              payment on or after the stated maturity of the debt security or
              any redemption date or repayment date for the debt security;

         o    reduce the percentage of holders of outstanding debt securities of
              such series necessary to modify or amend the indenture or to
              consent to any waiver under the indenture or reduce the
              requirements for voting or quorum described below;

         o    modify the change of control provisions, if any;

         o    reduce the percentage of outstanding debt securities of such
              series necessary to waive any past default; or

         o    modify any of the above requirements.

         We and the trustees may modify and amend the indentures without the
consent of any holder for the following purposes:

         o    to evidence the succession of another entity to us as obligor
              under an indenture;

         o    to add to our covenants for the benefit of the holders of all or
              any series of debt securities;

         o    to add events of default for the benefit of the holders of all or
              any series of debt securities;


                                      -17-

<PAGE>
         o    to add or change any provisions of the indentures to facilitate
              the issuance of bearer securities;

         o    to change or eliminate any provisions of the indentures but only
              if any such change or elimination will become effective only when
              there are no outstanding debt securities of any series created
              prior to the change or elimination that is entitled to the benefit
              of such provision;

         o    to establish the form or terms of debt securities of any series
              and any related coupons;

         o    secure the debt securities;

         o    to provide for the acceptance of appointment by a successor
              trustee or facilitate the administration of the trusts under the
              indentures by more than one trustee; and

         o    to change the indentures with respect to the authentication and
              delivery of additional series of debt securities, in order to cure
              any ambiguity, defect or inconsistency in the indentures, but only
              if such action does not adversely affect the interest of holders
              of debt securities of any series in any material respect.

         The indentures contain provisions for convening meetings of the holders
of debt securities of a series if debt securities of that series are issuable as
bearer securities. A meeting may be called at any time by the trustee and also
by such trustee pursuant to a request made to the trustee by us or the holders
of at least 10% in principal amount of the debt securities of such series
outstanding. In any case, notice must be given as provided in the indentures.
Any resolution presented at a meeting or duly reconvened adjourned meeting at
which a quorum is present may be adopted by the affirmative vote of the holders
of a majority in principal amount of the debt securities of that series, except
for any consent that must be given by the holder of each debt security affected,
as described above in this section. Any resolution passed or decision made in
accordance with the indentures at any duly held meeting of holders of debt
securities of any series will be binding on all holders of the debt securities
of that series and any related coupons. The quorum at any meeting called to
adopt a resolution, and at any reconvened meeting, will consist of persons
entitled to vote a majority in principal amount of the debt securities of a
series outstanding, unless a specified percentage in principal amount of the
debt securities of a series outstanding is required for the consent or waiver,
then the persons entitled to vote such specified percentage in principal amount
of the outstanding debt securities of such series will constitute a quorum.
However, if any action is to be taken at a meeting of holders of debt securities
of any series with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that the indentures expressly provide
may be made, given or taken by the holders of a specified percentage in
principal amount of all outstanding debt securities affected, or of the holders
of such series of debt securities and one or more additional series, then:

         o    there will be no minimum quorum requirement for such meeting; and

         o    the principal amount of the outstanding debt securities of such
              series that vote in favor of such request, demand, authorization,
              direction, notice, consent, waiver or other action will be taken
              into account in determining whether such request, demand,
              authorization, direction, notice, consent, waiver or other action
              has been made, given or taken under the indentures.


                                      -18-

<PAGE>
Defeasance

         We will be discharged from our obligations on the debt securities of
any series at any time if we deposit with the trustee sufficient cash or
government securities to pay the principal, interest, any premium and any other
sums due to the stated maturity date or a redemption date of the debt securities
of the series. If this happens, the holders of the debt securities of the series
will not be entitled to the benefits of the indenture except for registration of
transfer and exchange of debt securities and replacement of lost, stolen or
mutilated debt securities.

         Under U.S. federal income tax laws as of the date of this prospectus, a
discharge may be treated as an exchange of the related debt securities. Each
holder might be required to recognize gain or loss equal to the difference
between the holder's cost or other tax basis for the debt securities and the
value of the holder's interest in the trust. Holders might be required to
include as income a different amount than would be includable without the
discharge. Prospective investors should seek tax advice to determine their
particular consequences of a discharge, including the applicability and effect
of tax laws other than the U.S. federal income tax laws.

Financial Information

         While the debt securities are outstanding, we will file with the SEC,
to the extent permitted under the Exchange Act, the annual reports, quarterly
reports and other documents otherwise required to be filed with the SEC pursuant
to Section 13(a) or 15(d) of the Exchange Act even if we stop being subject to
those sections, and we will also provide to all holders and file with the
trustee copies of such reports and documents within 15 days after filing them
with the SEC or, if our filing such reports and documents with the SEC is not
permitted under the Exchange Act, within 15 days after we would have been
required to file such reports and documents if permitted, in each case at our
cost.

Terms Described in the Indentures

         Attributable Debt means, with respect to a lease under which any entity
is liable for a term of more than 12 months, the total net amount of rent
required to be paid by the entity under such lease during the remaining term
(excluding any subsequent renewal or other extension options held by the
lessee), discounted from the respective due dates of the rent to the date that
the Attributable Debt is being determined at a rate equal to the weighted
average of the interest rates borne by the outstanding debt securities,
compounded monthly. The net amount of rent required to be paid under any lease
for any such period will be the aggregate amount of the rent payable by the
lessee with respect to such period after excluding any amounts required to be
paid on account of maintenance and repairs, services, insurance, taxes,
assessments, water rates and similar charges and contingent rents (such as those
based on sales). In the case of any lease that is terminable by the lessee upon
the payment of a penalty, such net amount of rent will include the lesser of:

         o    the total discounted net amount of rent required to be paid from
              the later of the first date upon which such lease may be so
              terminated or the date of the determination of such net amount of
              rent, and

         o    the amount of such penalty (in which event no rent shall be
              considered as required to be paid under such lease subsequent to
              the first date upon which it may be so terminated).

         Consolidated Net Tangible Assets means the total amount of our assets
and those of our consolidated subsidiaries (less applicable reserves and other
properly deductible items) after deducting:


                                      -19-
<PAGE>
         o    all current liabilities (excluding any current liabilities that
              are by their terms extendible or renewable at the option of the
              obligor to a time more than 12 months after the time as of which
              the amount of the Consolidated Net Tangible Assets is being
              computed) and

         o    all goodwill, trade names, trademarks, patents, unamortized debt
              discount and expense and other like intangibles, all as set forth
              on our most recent consolidated balance sheet and computed in
              accordance with generally accepted accounting principles.

Payment, Registration and Transfer

         Unless we specify otherwise in a prospectus supplement, we will pay
principal, interest and any premium on the debt securities, and they may be
surrendered for payment or transferred, at the offices of the trustee. We will
make payment on registered securities by checks mailed to the persons in whose
names the debt securities are registered or by transfer to an account maintained
by the registered holder on days specified in the indenture or any prospectus
supplement. If we make debt securities payments in other forms, we will specify
the form and place in a prospectus supplement.

         We will maintain a corporate trust office of the trustee or another
office or agency for the purpose of transferring or exchanging fully registered
securities, without the payment of any service charge except for any tax or
governmental charge.

         The debt securities may be issued as registered securities or bearer
securities. Registered securities will be securities recorded in the securities
register kept at the corporate office of the trustee for the trust that issued
that series of securities. A bearer security is any debt security other than a
registered security. Registered securities will be exchangeable for other
registered securities of the same series and of a like aggregate principal
amount and tenor in different authorized denominations. If (but only if)
provided for in any prospectus supplement, bearer securities (with all unmatured
coupons, except as provided below, and all matured coupons in default) of any
series may be exchanged for registered securities of the same series of any
authorized denominations and of a like aggregate principal amount and tenor. In
such event, bearer securities surrendered in a permitted exchange for registered
securities between a regular record date and the relevant date for payment of
interest will be surrendered without the coupon relating to such date for
payment of interest. Interest will not be payable on such date on the registered
security issued in exchange for such bearer security but will be payable only to
the holder of such coupon when due, in accordance with the terms of the
indenture. Unless otherwise specified in any prospectus supplement, bearer
securities will not be issued in exchange for registered securities.

         In the event of any redemption of debt securities, we will not be
required to:

         o    issue, register the transfer of or exchange debt securities of any
              series during a period beginning at the opening of business 15
              days before any selection of debt securities of that series to be
              redeemed and ending at the close of business on (a) the day of
              mailing of the relevant notice of redemption if debt securities of
              the series are issuable only as registered securities, (b) the day
              of mailing of the relevant notice of redemption if the debt
              securities of the series are also issuable as registered
              securities and there is no publication, and (c) the day of the
              first publication of the relevant notice of redemption if the debt
              securities are issuable as bearer securities.


                                      -20-

<PAGE>
         o    register the transfer of or exchange any registered security, or
              portion thereof, called for redemption, except the unredeemed
              portion of any registered security being redeemed in part;

         o    exchange any bearer security selected for redemption, except to
              exchange such bearer security for a registered security of that
              series and like tenor that simultaneously is surrendered for
              redemption; or

         o    issue, register the transfer of or exchange any debt securities
              that have been surrendered for repayment at the option of the
              holder, except any portion not to be repaid.

Subordination

         Unless indicated differently in a prospectus supplement, Southern
Union's subordinated debt securities will be subordinated in right of payment to
the prior payment in full of all of its senior debt. This means that, upon:

         (a)   any distribution of the assets of Southern Union upon its
               dissolution, winding-up, liquidation or reorganization in
               bankruptcy, insolvency, receivership or other proceedings; or

         (b)   acceleration of the maturity of the subordinated debt securities;
               or

         (c)   a failure to pay any senior debt or interest thereon when due and
               continuance of that default beyond any applicable grace period;
               or

         (d)   acceleration of the maturity of any senior debt as a result of a
               default, the holders of all of Southern Union's senior debt will
               be entitled to receive:

                    o    in the case of clauses (a) and (b) above, payment of
                         all amounts due or to become due on all senior debt;

                    o    and in the case of clauses (c) and (d) above, payment
                         of all amounts due on all senior debt,

         before the holders of any of the subordinated debt securities are
         entitled to receive any payment. So long as any of the events in
         clauses (a), (b), (c) or (d) above has occurred and is continuing, any
         amounts payable on the subordinated debt securities will instead by
         paid directly to the holders of all senior debt to the extent necessary
         to pay the senior debt in full and, if any payment is received by the
         subordinated indenture trustee under the subordinated indenture or the
         holders of any of the subordinated debt securities before all senior
         debt is paid in full, the payment or distribution must be paid over to
         the holders of the unpaid senior debt. Subject to paying the senior
         debt in full, the holders of the subordinated debt securities will be
         subrogated to the rights of the holders of the senior debt to the
         extent that payments are made to the holders of senior debt out of the
         distributive share of the subordinated debt securities.

         "Senior debt" means with respect to the subordinated debt securities,
the principal of, and premium, if any, and interest on and any other payment in
respect of indebtedness due pursuant to any of the following, whether
outstanding on the date the subordinated debt securities are issued or
thereafter incurred, created or assumed;


                                      -21-

<PAGE>
         o    indebtedness of Southern Union for money borrowed by Southern
              Union or evidenced by securities, debentures (other than the
              subordinated debt securities), bonds or similar instruments issued
              by Southern Union, including any of Southern Union's mortgage
              bonds;

         o    capital lease obligations of Southern Union;

         o    obligations of Southern Union incurred for deferring the purchase
              price of property, with respect to conditional sales, or under any
              title retention agreement (but excluding trade accounts payable
              arising in the ordinary course of business);

         o    obligations of Southern Union with respect to letters of credit,
              banker's acceptances, security purchase facilities or similar
              credit transitions; and

         o    all indebtedness of others of the type referred to in the four
              preceding clauses assumed by or guaranteed in any manner by
              Southern Union or in effect guaranteed by Southern Union.

         Due to the subordination, if assets of Southern Union are distributed
upon insolvency, certain of its general creditors may recover more, ratably,
than holders of subordinated debt securities. The subordination provisions will
not apply to money and securities held in trust under the satisfaction and
discharge and the defeasance provisions of the applicable subordinated
indenture.

         The subordinated debt securities, the subordinated indenture and the
trust preferred securities guarantee do not limit Southern Union's ability to
incur additional indebtedness, including indebtedness that will rank senior to
subordinated debt securities and trust preferred securities guarantees. Southern
Union expects that it will incur substantial additional amounts of indebtedness
in the future.

Conversion Rights

         The terms and conditions of any series of debt securities being offered
that are convertible into common stock of Southern Union will be set forth in a
prospectus supplement. These terms will include the conversion price, the
conversion period, provisions as to whether conversion will be at the option of
the holder or the company issuing the debt securities, the events requiring an
adjustment of the conversion price and provisions affecting conversion in the
event that such series of debt securities are redeemed.

Governing Law

         Each indenture and the related debt securities will be governed by and
construed in accordance with the laws of the State of New York.

                         DESCRIPTION OF SOUTHERN UNION'S
                        COMMON STOCK AND PREFERRED STOCK

         Unless indicated differently in a prospectus supplement, this section
describes the terms of Southern Union's common stock and preferred stock. The
following description of Southern Union's common stock and preferred stock is
only a summary and is qualified in its entirety by reference to the certificate
of incorporation and bylaws of Southern Union. Keep in mind that it is the
certificate of incorporation and the bylaws that define your rights. Therefore,
you should read carefully the more detailed provisions of Southern Union's
restated certificate of incorporation, as amended, and Southern Union's bylaws,


                                      -22-

<PAGE>
as amended, copies of which are incorporated by reference as exhibits to the
registration statement of which this prospectus is a part.

General

         The authorized capital stock of Southern Union consists of (1)
200,000,000 shares of Southern Union common stock, par value $1 per share, and
(2) 6,000,000 shares of preferred stock, no par value. As of December 31, 2002,
there were 55,554,856 issued and outstanding shares of Southern Union common
stock and no shares of Southern Union preferred stock issued and outstanding. No
other classes of capital stock are authorized under the Southern Union restated
certificate of incorporation, as amended. The issued and outstanding shares of
Southern Union common stock are duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights.

                           SOUTHERN UNION COMMON STOCK

         Except with respect to the election of directors, the holders of
Southern Union common stock are entitled to one vote for each share held of
record on all matters submitted to a vote of stockholders. At all elections of
directors of Southern Union, the holders of Southern Union common stock is
entitled to that number of votes which equals the number of shares held by such
stockholder multiplied by the number of directors to be elected, and such
stockholder may cast all of such votes for a single nominee or distribute them
among the nominees as such stockholder deems appropriate.

         The holders of Southern Union common stock are entitled to receive
dividends as and when declared by the Southern Union board out of funds legally
available therefore, subject to any preferential dividend rights of outstanding
shares of Southern union preferred stock.

         Subject to the rights of holders of Southern Union cumulative preferred
stock, upon liquidation, dissolution or winding up of Southern Union, the
holders of Southern Union common stock are entitled to receive ratably the net
assets of Southern Union available after the payment of all debts and other
liabilities.

         Holders of Southern Union common stock have no preemptive,
subscription, redemption or conversion rights.

Other Considerations Relating to Southern Union Common Stock

         In September 2000, Southern Union completed its acquisition of Fall
River Gas and ProvEnergy. Southern Union is a Delaware corporation. As discussed
above, the rights of a holder of Southern Union common stock are presently
governed by Southern Union's restated certificate of incorporation and bylaws
and the Delaware General Corporation Law ("DGCL"). However, Chapter 164 of the
Massachusetts General Laws ("MGL") provides that the rights of stockholders of
Massachusetts gas companies, such as Fall River Gas, are also governed by
certain provisions of Chapter 164 of the MGL, as well as certain provisions of
Chapter 156B of the MGL (Massachusetts' general business corporation statute).

         Even though Southern Union has continued to exist as a Delaware
corporation following its merger with Fall River Gas and Southern Union's
restated certificate of incorporation and bylaws have survived rather than those
of Fall River Gas, there are certain areas where the provisions of Chapter 164
of the MGL differ from those of the DGCL with respect to certain corporate
governance matters, including, more specifically, with regard to requirements
for shareholder approval in certain instances. While Southern Union continues to


                                      -23-

<PAGE>
believe that following the merger, the provisions of the DGCL should take
precedence with regard to these areas where differences exist, it is uncertain
whether in any or all of these instances, the corporate affairs, including the
rights of stockholders to vote on certain matters, of the combined company may
be subject to some or all of the corporate governance provisions of Chapter 164
which are applicable to Massachusetts gas companies subject to that Chapter.
Neither the Massachusetts Department of Telecommunications and Energy ("MDTE"),
which regulates Massachusetts gas distribution companies, nor the Courts of the
Commonwealth of Massachusetts, have determined whether under Chapter 164 of the
MGL, a utility that distributes gas to customers within Massachusetts but it not
incorporated under Massachusetts law is subject to all or any portions of the
MGL's corporate governance provisions in Chapter 164 that would otherwise
pertain to a gas distribution company incorporated domestically in
Massachusetts.

         In addition, a company operating as a utility in either Massachusetts
or Rhode Island, cannot issue a stock dividend without approval from the MDTE or
the Rhode Island Public Utilities Commission ("RIDPUC"), as applicable.
Historically, we have had a policy of declaring and distributing an annual 5%
stock dividend. Since our 2001 dividend, we have sought and received approval
for such dividend from both agencies.

         The registrar and transfer agent for the Southern Union common stock is
BankBoston, N.A. c/o EquiServe, L.P.

                         SOUTHERN UNION PREFERRED STOCK

         Southern Union, by resolution of the Southern Union board and without
any further vote or action by the holders of Southern Union common stock, has
the authority, subject to certain limitations, to issue up to an aggregate of
6,000,000 shares of Southern Union preferred stock in one or more classes or
series, and to determine the designation and the number of shares of any class
or series and to fix the designation, powers, preferences and rights of each
such series and the qualifications, limitations or restrictions thereof.
Currently, there are no shares of Southern Union preferred stock outstanding.

         Prior to the issuance of shares of each series of Southern Union
preferred stock, the Board of Directors is required to adopt resolutions and
file a certificate of designation with the Secretary of State of the State of
Delaware with respect to the preferred stock, both of which we will make
publicly available in a filing we will make with the SEC with respect to any
offering of debt securities. The certificate of designation will fix for each
series the designation and number of shares and the rights, preferences,
privileges and restrictions of the shares including, but not limited to, the
following:

         (a)  the number of shares constituting that series and the distinctive
              designation of each such series;

         (b)  the dividend rate on the shares of that series, whether dividends
              shall be cumulative, and, if so, from which date or dates, and the
              relative rights of priority, if any, of payment of dividends on
              shares of each series;

         (c)  whether each series shall have voting rights, in addition to the
              voting rights provided by law, and if so, the terms of such voting
              rights;


                                      -24-

<PAGE>
         (d)  whether each series shall have conversion privileges, and, if so,
              the terms and conditions of such conversion, including provision
              for adjustment of the conversion rate in such events as the Board
              of Directors shall determine;

         (e)  whether or not the shares of each series shall be redeemable, and,
              if so, the terms and conditions of such redemption, including the
              date or date upon or after which they shall be redeemable, and the
              amount per share payable in case or redemption, which amount may
              vary under different conditions and at different redemption dates;

         (f)  whether each series shall have a sinking fund for the redemption
              or purchase of shares of each such series, and if so, the terms
              and amount of such sinking fund;

         (g)  the rights of the shares of each series in the event of voluntary
              or involuntary liquidation, dissolution or winding up of Southern
              Union, and the relative rights of priority, if any, of payment of
              shares of each series; and

         (h)  any other relative rights, preferences and limitations of each
              series.

         All shares of Southern Union preferred stock will, when issued, be
fully paid and nonassessable and will not have any preemptive or similar rights.

         In addition to the terms listed above, we will set forth in a
prospectus supplement the following terms relating to the class or series of
Southern Union preferred stock being offered:

         (a)  the number of shares of the Southern Union preferred stock
              offered, the liquidation preference per share and the offering
              price of the Southern Union preferred stock;

         (b)  the procedures for any auction and remarketing, if any, for the
              Southern Union preferred stock;

         (c)  any listing of the preferred stock on any securities exchange; and

         (d)  a discussion of any material and/or special United States federal
              income tax considerations applicable to the Southern Union
              preferred stock.

Rank

         The Southern Union preferred stock will rank, with respect to dividends
and upon our liquidation, dissolution or winding up:

         (a)  senior to all classes or series of Southern Union common stock and
              to all of our equity securities ranking junior to the Southern
              Union preferred stock;

         (b)  on a parity withal of the Southern Union's equity securities the
              terms of which specifically provide that the equity securities
              rank on a parity with the Southern Union preferred stock; and

         (c)  junior to all of Southern Union's equity securities the terms of
              which specifically provide that the equity securities rank senior
              to the Southern Union preferred stock.


                                      -25-

<PAGE>
                             DESCRIPTION OF WARRANTS

         This section describes the general terms of the warrants that Southern
Union may offer and sell by this prospectus. This prospectus and any
accompanying prospectus supplement will contain the material terms and
conditions for each warrant. The accompanying prospectus supplement may add,
update or change the terms and conditions of the warrants as described in this
prospectus.

General

         Southern Union may issue warrants to purchase debt securities,
preferred stock or common stock. Warrants may be issued independently or
together with any securities and may be attached to or separate from those
securities. The warrants will be issued under warrant agreements to be entered
into between us and a bank or trust company, as warrant agent, all of which will
be described in the prospectus supplement relating to the warrants we are
offering. The warrant agent will act solely as our agent in connection with the
warrants and will not have any obligation or relationship of agency or trust for
or with any holders or beneficial owners of warrants. A copy of the warrant
agreement will be made publicly available in a filing we will make with the SEC
with respect to any offering of warrants.

Debt Warrants

         Southern Union may issue warrants for the purchase of our debt
securities. As explained below, each debt warrant will entitle its holder to
purchase debt securities at an exercise price set forth in, or to be
determinable as set forth in, the related prospectus supplement. Debt warrants
may be issued separately or together with debt securities.

         The debt warrants are to be issued under debt warrant agreements to be
entered into between us and one or more banks or trust companies, as debt
warrant agent, as will be set forth in the prospectus supplement relating to the
debt warrants being offered by the prospectus supplement and this prospectus. A
copy of the debt warrant agreement, including a form of debt warrant certificate
representing the debt warrants, will be made publicly available in a filing we
will make with the SEC with respect to any offering of equity warrants.

         The particular terms of each issue of debt warrants, the debt warrant
agreement relating to the debt warrants and the debt warrant certificates
representing debt warrants will be described in the applicable prospectus
supplement, including, as applicable;

         o    the title of the debt warrants;

         o    the initial offering price;

         o    the title, aggregate principal amount and terms of the debt
              securities purchasable upon exercise of the debt warrants;

         o    the currency or currency units in which the offering price, if
              any, and the exercise price are payable;

         o    the title and terms of any related debt securities with which the
              debt warrants are issued and the number of the debt warrants
              issued with each debt security;

         o    the date, if any, on and after which the debt warrants and the
              related debt securities will be separately transferable;


                                      -26-


<PAGE>
         o    the principal amount of debt securities purchasable upon exercise
              of each debt warrant and the price at which that principal amount
              of debt securities may be purchased upon exercise of each debt
              warrant;

         o    if applicable, the minimum or maximum number of warrants that may
              be exercised at any one time;

         o    the date on which the right to exercise the debt warrants will
              commence and the date on which the right will expire;

         o    if applicable, a discussion of United States federal income tax,
              accounting or other considerations applicable to the debt
              warrants;

         o    whether the debt warrants represented by the debt warrant
              certificates will be issued in registered or bearer form, and, if
              registered, where they may be transferred and registered;

         o    anti-dilution provisions of the debt warrants, if any;

         o    redemption or call provisions, if any, applicable to the debt
              warrants: and

         o    any additional terms of the debt warrants, including terms,
              procedures and limitations relating to the exchange and exercise
              of the debt warrants.

         Debt warrant certificates will be exchangeable for new debt warrant
certificates of different denominations and, if in registered form, may be
presented for registration of transfer and debt warrants may be exercised at the
corporate trust office of the debt warrant agent or any other office indicated
in the related prospectus supplement. Before the exercise of debt warrants,
holders of debt warrants will not be entitled to payments of principal, premium,
if any, or interest, if any on the debt securities purchasable upon exercise of
the debt warrants, or to enforce any of the covenants in the applicable
indenture.

Equity Warrants

         We may issue warrants for the purchase of our equity securities such as
our preferred stock or common stock. As explained below, each equity warrant
will entitle its holder to purchase equity securities at an exercise price set
forth in, or to be determinable as set forth in, the related prospectus
supplement. Equity warrants may be issued separately or together with equity
securities. The equity warrants are to be issued under equity warrant agreements
to be entered into between us and one or more banks or trust companies, as
equity warrant agent, as will be set forth in the prospectus supplement relating
to the equity warrants being offered by the prospectus supplement and this
prospectus. A copy of the equity warrant agreement, including a form of equity
warrant certificate representing the equity warranty, will be made publicly
available in a filing we will make with the SEC with respect to any offering of
equity warrants.

         The particular terms of each issue of equity warrants, the equity
warrant agreement relating to the equity warrants and the equity warrant
certificates representing equity warrants will be described in the applicable
prospectus supplement, including, as applicable;

         o    the title of the equity warrants;

         o    the initial offering price;

         o    the aggregate number of equity warrants and the aggregate number
              of shares of the equity security purchasable upon exercise of the
              equity warrants;

                                      -27-

<PAGE>
         o    the currency or currency units in which the offering price, if
              any, and the exercise price are payable;

         o    if applicable, the designation and terms of the equity securities
              with which the equity warrants are issued, and the number of
              equity warrants issued with each equity security;

         o    the date, if any, on and after which the equity warrants and the
              related equity security will be separately transferable;

         o    if applicable, the minimum or maximum number of the warrants that
              may be exercised at any one time;

         o    the date on which the right to exercise the equity warrants will
              commence and the date on which the right will expire;

         o    if applicable, a discussion of United States federal income tax,
              accounting or other considerations applicable to the equity
              warrants;

         o    anti-dilution provisions of the equity warrants, if any;

         o    redemption or call provisions, if any, applicable to the equity
              warrants: and

         o    any additional terms of the equity warrants, including terms,
              procedures and limitations relating to the exchange and exercise
              of the equity warrants.

         Holders of equity warrants will not be entitled, solely by virtue of
being holders, to vote, to consent, to receive dividends, to receive notice as
shareholders with respect to any meeting of shareholders for the election of
directors or any other matter, or to exercise any rights whatsoever as a holder
of the equity securities purchasable upon exercise of the equity warrants.

           SECURITIES PURCHASE CONTRACTS AND SECURITIES PURCHASE UNITS

         This section describes the general terms of the securities purchase
contracts and securities purchase units that Southern Union may offer and sell
by this prospectus. This prospectus and any accompanying prospectus supplement
will contain the material terms and conditions for each warrant. The
accompanying prospectus supplement may add, update or change the terms and
conditions of the securities purchase contracts and securities purchase units as
described in this prospectus.

Stock Purchase Contract and Stock Purchase Units

         Southern Union may issue stock purchase contracts, representing
contracts obligating holders to purchase from us, and obligating us to sell to
the holders, a specified number of shares of common stock or preferred stock at
a future date or dates, or a variable number of shares of common stock or
preferred stock for a stated amount of consideration. The price per share and
the number of shares of common stock or preferred stock may be fixed at the time
the stock purchase contracts are issued or may be determined by reference to a
specific formula set forth in the stock purchase contracts. Any such formula may
include anti-dilution provisions to adjust the number of shares of common stock
or preferred stock issuable pursuant to the stock purchase contracts upon
certain events. The stock purchase contracts may be issued separately or as a
part of units consisting of a stock purchase contract and, as security for the
holder's obligations to purchase the shares under the stock purchase contracts,
either (a) our senior debt securities or subordinated debt securities, (b) our
debt obligations of third parties, including U.S. Treasury securities, or (c)
preferred securities of a trust. The stock purchase contracts may require us to


                                      -28-
<PAGE>
make periodic payments to the holders of the stock purchase units or vice versa,
and such payments may be unsecured or prefunded on some basis. The stock
purchase contracts may require holders to secure their obligations in a
specified manner and in certain circumstances we may deliver newly issued
prepaid stock purchase contracts upon release to a holder of any collateral
securing such holder's obligations under the original stock purchase contract.
The stock purchase contract will be made publicly available in a filing we will
make with the SEC with respect to any issuance of stock purchase contracts and
stock purchase units.

Debt Purchase Contracts and Debt Purchase Units.

         Southern Union may issue debt purchase contracts, representing
contracts obligating holders to purchase from us, and obligating us to sell to
the holders, a specified principal amount of debt securities at a future date or
dates. The purchase price and the interest rate may be fixed at the time the
debt purchase contracts are issued or may be determined by reference to a
specific formula set forth in the debt purchase contracts.

         The debt purchase contracts may be issued separately or as a part of
units consisting of debt purchase contracts and, as security for the holder's
obligations to purchase the securities under the debt purchase contracts, either
(a) our senior debt securities or subordinated debt securities, (b) our debt
obligations of third parties, including U.S. Treasury securities, or (c)
preferred securities of a trust. The debt purchase contracts may require us to
make periodic payments to the holders of the debt purchase units or vice versa,
and such payments may be unsecured or prefunded on some basis. The debt purchase
contracts may require holders to secure their obligations in a specified manner
and in certain circumstances we may deliver newly issued prepaid debt purchase
contracts upon release to a holder of any collateral securing such holder's
obligations under the original debt purchase contract. The applicable prospectus
supplement will describe the general terms of any purchase contracts or purchase
units and, if applicable, prepaid purchase contracts. The description in the
prospectus supplement will not purport to be complete and will be qualified in
its entirety by reference to (a) the purchase contracts, (b) the collateral
arrangements and depositary arrangements, if applicable, relating to such
purchase contracts or purchase units and (c) if applicable, the prepaid purchase
contracts and the document pursuant to which such prepaid purchase contracts
will be issued, all of which will be made publicly available in a filing we will
make with the SEC with respect to any issuance of debt purchase contracts and
debt purchase units. Material United States federal income tax considerations
applicable to the purchase contracts and the purchase units will also be
discussed in the applicable prospectus supplement.

                                DEPOSITARY SHARES

         This section describes the general terms of the depositary shares
Southern Union may offer and sell by this prospectus. This prospectus and any
accompanying prospectus supplement will contain the material terms and
conditions for the depositary shares. The accompanying prospectus supplement may
add, update, or change the terms and conditions of the depositary shares as
described in this prospectus.

General

         Southern Union may, at its option, elect to offer depositary shares,
each representing a fraction (to be set forth in the prospectus supplement
relating to a particular series of preferred stock) of a share of a particular
class or series of preferred stock as described below. In the event we elect to
do so, depositary receipts evidencing depositary shares will be issued to the
public. The shares of any class or series of preferred stock represented by


                                      -29-

<PAGE>
depositary shares will be deposited under a deposit agreement among us, a
depositary selected by us and the holders of the depositary receipts. The
depositary will be a bank or trust company having its principal office in the
United States and having a combined capital and surplus of at least $50,000,000.
Subject to the terms of the deposit agreement, each owner of a depositary share
will be entitled, in proportion to the applicable fraction of a share of
preferred stock represented by such depositary share, to all the rights and
preferences of the shares of preferred stock represented by the depositary
share, including dividend, voting, redemption and liquidation rights.

         The depositary shares will be evidenced by depositary receipts issued
pursuant to the deposit agreement. Depositary receipts will be distributed to
those persons purchasing the fractional shares of the related class or series of
preferred shares in accordance with the terms of the offering described in the
related prospectus supplement.

         Pending the preparation of definitive depositary receipts the
depositary may, upon our written order, issue temporary depositary receipts
substantially identical to, and entitling the holders thereof to all the rights
pertaining to, the definitive depositary receipts but not in definitive form.
Definitive depositary receipts will be prepared without unreasonable delay, and
temporary depositary receipts will be exchangeable for definitive depositary
receipts without charge to the holder.

Dividends and Other Distributions

         The depositary will distribute all cash dividends or other cash
distributions received for the preferred stock to the entitled record holders of
depositary shares in proportion to the number of depositary shares that the
holder owns on the relevant record date, provided, however, that if we or the
depositary is required by law to withhold an amount on account of taxes, then
the amount distributed to the holders of depositary shares shall be reduced
accordingly. The depositary will distribute only an amount that can be
distributed without attributing to any holder of depositary shares a fraction of
one cent. The depositary will add the undistributed balance to and treat it as
part of the next sum received by the depositary for distribution to holders of
the depositary shares.

         If there is a non-cash distribution, the depositary will distribute
property received by it to the entitled record holders of depositary shares, in
proportion, insofar as possible, to the number of depositary shares owned by the
holders, unless the depositary determines, after consultation with us, that it
is not feasible to make such distribution. If this occurs, the depositary may,
with our approval, sell such property and distribute the net proceeds from such
sale to the holders. The deposit agreement also will contain provisions relating
to how any subscription or similar rights that we may offer to holders of the
preferred stock will be available to the holders of the depositary shares.

Withdrawal of Shares

         Upon surrender of the depositary receipts at the corporate trust office
of the depositary unless the related depositary shares have previously been
called for redemption, converted or exchanged into our other securities, the
holder of the depositary shares evidenced thereby is entitled to delivery of the
number of whole shares of the related class or series of preferred stock and any
money or other property represented by such depositary shares. Holders of
depositary receipts will be entitled to receive whole shares of the related
class or series of preferred stock on the basis set forth in the prospectus
supplement for such class or series of preferred stock, but holders of such
whole shares of preferred stock will not thereafter be entitled to exchange them
for depositary shares. If the depositary receipts delivered by the holder


                                      -30-

<PAGE>
evidence a number of depositary shares in excess of the number of depositary
shares representing the number of whole shares of preferred stock to be
withdrawn, the depositary will deliver to such holder at the same time a new
depositary receipt evidencing such excess number of depositary shares. In no
event will fractional shares of preferred stock be delivered upon surrender of
depositary receipts to the depositary.

Conversion, Exchange and Redemption

         If any class or series of preferred stock underlying the depositary
shares may be converted or exchanged, each record holder of depositary receipts
representing the shares of preferred stock being converted or exchanged will
have the right or obligation to convert or exchange the depositary shares
represented by the depositary receipts.

         Whenever we redeem or convert shares of preferred stock held by the
depositary, the depositary will redeem or convert, at the same time, the number
of depositary shares representing the preferred stock to be redeemed or
converted. The depositary will redeem the depositary shares from the proceeds it
receives from the corresponding redemption of the applicable series of preferred
stock. The depositary will mail notice of redemption or conversion to the record
holders of the depositary shares that are to be redeemed between 30 and 60 days
before the date fixed for redemption or conversion. The redemption price per
depositary share will be equal to the applicable fraction of the redemption
price per share on the applicable class or series of preferred stock. If less
than all the depositary shares are to be redeemed, the depositary will select
which shares are to be redeemed by lot on a pro rata basis or by any other
equitable method as the depositary may decide. After the redemption or
conversion date, the depositary shares called for redemption or conversion will
no longer be outstanding. When the depositary shares are no longer outstanding,
all rights of the holders will end, except the right to receive money,
securities or other property payable upon redemption or conversion.

Voting the Preferred Stock

         When the depositary receives notice of a meeting at which the holders
of the particular class or series of preferred stock are entitled to vote, the
depositary will mail the particulars of the meeting to the record holders of the
depositary shares. Each record holder of depositary shares on the record date
may instruct the depositary on how to vote the shares of preferred stock
underlying the holder's depositary shares. The depositary will try, if
practical, to vote the number of shares of preferred stock underlying the
depositary shares according to the instructions. We will agree to take all
reasonable action requested by the depositary to enable it to vote as
instructed.

Amendment and Termination of the Deposit Agreement

         Southern Union and the depositary may agree at any time to amend the
deposit agreement and the depositary receipt evidencing the depositary shares.
Any amendment that (a) imposes or increases certain fees, taxes or other charges
payable by the holders of the depositary shares as described in the deposit
agreement that (b) otherwise materially adversely affects any substantial
existing rights of holders of depositary shares, will not take effect until such
amendment is approved by the holders of at least a majority of the depositary
shares then outstanding. Any holder of depositary shares that continue to hold
its shares after such amendment has become effective will be deemed to have
agreed to the amendment.


                                      -31-

<PAGE>
         Southern Union may direct the depositary to terminate the deposit
agreement by mailing a notice of termination of holders of depositary shares at
least 30 days prior to termination. The depositary may terminate the deposit
agreement if 90 day have elapsed after the depositary delivered written notice
of its election to resign and a successor depositary is not appointed. In
addition, the deposit agreement will automatically terminate if:

         o    the depositary has redeemed all related outstanding depositary
              shares;

         o    all outstanding shares of preferred stock have been converted into
              or exchanged for common stock; or

         o    we have liquidated, terminated or wound up our business and the
              depositary has distributed the preferred stock of the relevant
              series to the holders of the related depositary shares.

Reports and Obligations

         The depositary will forward to the holders of depositary shares all
reports and communications from us that are delivered to the depositary and that
we are required by law, the rules of an applicable securities exchange or our
amended and restated certificate of incorporation to furnish to the holders of
the preferred stock. Neither we nor the depositary will be liable if the
depositary is prevented or delayed by law or any circumstances beyond its
control in performing its obligations under the deposit agreement. The deposit
agreement limits our obligations to performance in good faith of the duties
stated in the deposit agreement. The depositary assumes no obligation and will
not be subject to liability under the deposit agreement except to perform such
obligations as are set forth in the deposit agreement without negligence or bad
faith. Neither we nor the depositary will be obligated to prosecute or defend
any legal proceeding connected with any depositary shares or class or series of
preferred stock unless the holders of depositary shares requesting us to do so
furnish us with a satisfactory indemnity. In performing our obligations, we and
the depositary may rely and act upon the advice of our counsel or accountants,
on any information provided to us by a person presenting shares for deposit, any
holder of a receipt, or any other document believed by us or the depositary to
be genuine and to have been signed or presented by the proper party or parties.

Payment of Fees and Expenses

         We will pay all fees, charges and expenses of the depositary, including
the initial deposit of the preferred stock and any redemption of the preferred
stock. Holders of depositary shares will pay taxes and governmental charges and
any other charges as are stated in the deposit agreement for their accounts.

Resignation and Removal of Depositary

         At any time, the depositary may resign by delivering notice to us, and
we may remove the depositary at any time. Resignations or removals will take
effect upon the appointment of a successor depositary and its acceptance of the
appointment. The successor depositary must be appointed within 90 days after the
delivery of the notice of resignation or removal and must be a bank or trust
company having its principal office in the United States and having a combined
capital and surplus of at least $50,000,000.


                                      -32-

<PAGE>
                           TRUST PREFERRED SECURITIES

         The following is a summary of the material terms and provisions of the
trust preferred securities and the trust agreements. It summarizes only those
portions of the trust preferred securities and the trust agreements which we
believe will be most important in your decision to invest in the trust preferred
securities. You should keep in mind, however, that it is the trust agreements,
and not this summary, that define your rights. There may be other provisions in
the trust agreements which are also important to you. You should read the trust
agreements themselves for a full description of their terms. A form of each
trust agreement is filed as an exhibit to the registration statement that
includes this prospectus. See "Where You Can Find More Information" for
information on how to obtain a copy of the form of each trust agreement.

         Each trust may issue one series of trust preferred securities having
terms described in the prospectus supplement for that series. The trust
agreement of each trust authorizes the establishment of no more than one series
of trust preferred securities, which will represent undivided beneficial
interests in the assets of the trust. The terms of the trust preferred
securities, including distribution, redemption, voting and liquidation rights
and any other preferred, deferred or other special rights or restrictions, will
be described in the trust agreement or made part of the trust agreement by the
Trust Indenture Act. The prospectus supplement for each specific series of trust
preferred securities will state the terms for the trust preferred securities of
that series, including:

         o    the distinctive designation of the trust preferred securities;

         o    the number of trust preferred securities to be issued;

         o    the annual distribution rate (or method of determining such rate)
              and the date or dates upon which such distributions will be
              payable;

         o    whether distributions on the trust preferred securities will be
              cumulative, and, if so, the date or dates or method of determining
              the date or dates from which distributions on trust preferred
              securities will be cumulative;

         o    the amount or amounts which will be paid out of the assets of the
              trust to the holders of the trust preferred securities upon
              voluntary or involuntary dissolution, winding-up or termination of
              the trust;

         o    the obligation, if any, of the trust to purchase or redeem the
              trust preferred securities following an exercise by Southern Union
              of an option under the corresponding subordinated debt securities,
              and the terms and conditions of such purchases or redemptions;

         o    the period or periods, if any, within which the terms and
              conditions, including the price or prices or the rate or rates of
              conversion or exchange and the terms and conditions of any
              adjustments, upon which the trust preferred securities shall be
              convertible or exchangeable at the option of the holder thereof
              into other property or cash;

         o    the voting rights, if any, of the trust preferred securities in
              addition to those required by law, including the number of votes
              per trust preferred security and any requirement for the approval
              by the holders of the trust preferred securities for specified
              actions or amendments to the trust agreement;

         o    the additional payments, if any, which the trust will pay as a
              distribution as necessary so that the net amounts reserved by the
              trust and distributable to the holders of the trust preferred

                                      -33-
<PAGE>
              securities, after all taxes, duties, assessments or governmental
              charges of whatever nature have been paid will not be less than
              the amount that would have been reserved and distributed by the
              trust, and the amount the holders of the trust preferred
              securities would have reserved, had no such taxes, duties
              assessments or governmental charges been imposed;

         o    the terms and conditions, if any, upon which the subordinated debt
              securities held by the trust may be distributed to the holders of
              the trust preferred securities; and

         o    any other relevant rights, powers, preferences, privileges,
              limitations or restrictions of the trust preferred securities
              consistent with the trust agreement and applicable law.

         All trust preferred securities offered by this prospectus will be
guaranteed by Southern Union on a subordinated basis and to the extent described
under "Description of the Trust Guarantees." Certain United States federal
income tax considerations applicable to any offering of the trust preferred
securities will be described in the prospectus supplement relating thereto.

         In connection with the issuance of trust preferred securities by a
trust, that trust will issue one series of common securities having such terms,
including distribution, redemption, voting and liquidation rights and such other
preferred, deferred or other rights or restrictions as will be described in the
trust agreement. Except as described below, the terms of the common securities
issued by a trust will be substantially identical to the terms of the trust
preferred securities issued by that trust. The common securities will rank
equally with, and payments will be made on the common securities pro rata with,
the related trust preferred securities except that, upon an event of default
under the trust agreement, the rights of the holders of the common securities to
payments in respect of distributions and payments upon liquidation, redemption
and otherwise will be subordinated to the rights of the holders of the trust
preferred securities. Except in certain limited circumstances, the common
securities will have the right to vote and the right to appoint, remove or
replace any of the trustees of the related trust. All common securities will be
directly or indirectly owned by Southern Union.

Effect of Obligations Under the Subordinated Debt Securities and the Guarantees

         The purpose of each trust is to issue the common securities and the
trust preferred securities and to use the proceeds from such issuance to acquire
subordinated debt securities from Southern Union.

         As long as payments of interest and other payments on the subordinated
debt securities are made when due, such payments will be sufficient to cover
distributions and payments due on the common securities and the trust preferred
securities because of the following factors:

         o    the total principal amount of the subordinated debt securities
              will be equal to the sums of the total stated liquidation amount
              of the common securities and the trust preferred securities;

         o    the interest rate and the interest and other payment dates on the
              subordinated debt securities will match the distribution rate and
              distribution and other payment dates for the common securities and
              the trust preferred securities;

         o    Southern Union will pay all, and no trust shall be obligated to
              pay any, of the trusts' costs, expenses, debts and liabilities
              (other than with respect to the common securities and the trust
              preferred securities); and


                                      -34-

<PAGE>
         o    the trustees may not take or cause or permit the trust to, among
              other things, engage in any activity that is not consistent with
              the purposes of the trust.

         Payments of distributions and other payments due on the trust preferred
securities (to the extent funds for distributions and other payments are
available to the trust) are guaranteed by Southern Union as and to the extent
discussed under "Description of the Trust Guarantees" below. If Southern Union
does not make interest payments on the subordinated debt securities purchased by
a trust, it is expected that that trust will not have sufficient funds to pay
distributions on the trust preferred securities. The Southern Union guarantees,
which are for the purpose of ensuring that each trust performs its obligations
to pay distributions on the trust preferred securities, do not apply to any
payment of distributions unless and until the trusts have sufficient funds for
the payment of distributions and other payments on the trust preferred
securities. Each trust will have sufficient funds only if and to the extent that
Southern Union has made a payment of interest or principal on the subordinated
debt securities held by the trust as its sole asset. The Southern Union
guarantee for a trust, when taken together with Southern Union's obligations
under the subordinated debt securities held by that trust and the related
indenture, and Southern Union's obligations under the applicable trust
agreement, including its obligations to pay costs, expenses, debts and
liabilities of the trust (other than with respect to the common securities and
the trust preferred securities), provides a full and unconditional guarantee of
amounts due on the trust preferred securities issued by that trust.

         If Southern Union fails to make interest or other payments on the
subordinated debt securities issued by a trust when due (taking account of any
extension period), the applicable trust agreement provides a mechanism whereby
the holders of the trust preferred securities may direct the property trustee to
enforce its rights under the subordinated debt securities held by the trust. If
a property trustee fails to enforce its rights under the subordinated debt
securities, a holder of related trust preferred securities may, to the fullest
extent permitted by applicable law, institute a legal proceeding against
Southern Union to enforce the property trustee's rights under the subordinated
debt securities without first instituting any legal proceeding against the
property trustee or any other person or entity. Notwithstanding the foregoing,
if an event of default has occurred and is continuing under a trust agreement,
and such event is attributable to the failure of Southern Union to pay interest
or principal on the related subordinated debt securities on the date such
interest or principal is otherwise payable (or, in the case of redemption, on
the redemption date), then a holder of the related trust preferred securities
may institute legal proceedings directly against Southern Union to obtain
payment. If Southern Union fails to make payments under any guarantee, that
guarantee provides a mechanism whereby the holders of the related trust
preferred securities may direct the guarantee trustee to enforce its rights
thereunder. Any holder of trust preferred securities may institute a legal
proceeding directly against Southern Union to enforce the guarantee trustee's
rights under a related guarantee without first instituting a legal proceeding
against the trust, the guarantee trustee or any other person or entity.

                       DESCRIPTION OF THE TRUST GUARANTEES

         At the same time as a trust issues trust preferred securities, Southern
Union will execute and deliver a trust guarantee for the benefit of the holders
of the trust preferred securities. Each trust guarantee will be qualified as an
indenture under the Trust Indenture Act. Wilmington Trust Company will act as
the indenture trustee, or guarantee trustee, under the trust guarantee.

         The following is a summary of the material terms and provisions of the
trust guarantees. It summarizes only those portions of the trust guarantees
which we believe will be most important to your decision to invest in the trust
preferred securities. You should keep in mind, however, that it is the trust


                                      -35-
<PAGE>
guarantees, and not this summary, which define your rights. There may be other
provisions in the trust guarantees which are also important to you. You should
read the trust guarantees themselves for a full description of their terms. A
form of the trust guarantees is filed as an exhibit to the registration
statement that includes this prospectus. See "Where You Can Find More
Information" for information on how to obtain a copy of the form of the trust
guarantees.

General

         Under each trust guarantee, Southern Union will irrevocably and
unconditionally agree, to the extent set forth therein, to pay the trust
guarantee payments described below to the holders of the related trust preferred
securities in the event they are not paid by or on behalf of the trust when due,
regardless of any defense, right of set-off or counterclaim which the trust may
have or assert other than the defense of payment.

         The following payments (referred to as trust guarantee payments) to the
extent not paid by the related trust when due, will be subject to the related
trust guarantee:

         o    any accumulated and unpaid distributions required to be paid on
              the trust preferred securities, to the extent that the trust has
              funds available for payment at that time;

         o    the redemption price of any trust preferred securities called for
              redemption, to the extent that the trust has funds available for
              payment at that time; and

         o    upon voluntary or involuntary dissolution, winding-up or
              termination of the trust (other than in connection with the
              distribution of the subordinated debt securities to the holders of
              trust preferred securities or the redemption of all trust
              preferred securities), the lesser of:

                  --  the aggregate of the liquidation amount and all accrued
                      and unpaid distributions on the trust preferred
                      securities, to the extent that the trust has funds
                      available for payment at that time; and

                  --  the amount of assets of the trust remaining available for
                      distribution to holders of its trust preferred securities.

         Southern Union's obligation to make a trust guarantee payment will be
satisfied by direct payment of the required amounts to the holders of the trust
preferred securities or by causing the trust to pay the required amounts to the
holders.

         Each trust guarantee will be a full, unconditional and irrevocable
guarantee on a subordinated basis of the trust's obligations under the trust
preferred securities, but will apply only to the extent that the trust has funds
sufficient to make these payments. If Southern Union does not make interest
payments on the subordinated debt securities purchased by a trust, that trust
will not be able to pay distributions on the trust preferred securities issued
by it and will not have funds available for such payment.

         Southern Union will, for each trust, through the trust guarantee, the
trust agreement, the subordinated debt securities and the indenture, taken
together, fully, irrevocably and unconditionally guarantee all of the trust's
obligations under the trust preferred securities. No single document standing
alone or operating in conjunction with fewer than all of the other documents
will constitute such guarantee. It is only the combined operation of these
documents that will have the effect of providing a full, irrevocable and


                                      -36-
<PAGE>
unconditional guarantee of the trust's obligations under the trust preferred
securities.

         Southern Union has also agreed separately to irrevocably and
unconditionally guarantee the obligations of the trusts with respect to the
common securities to the same extent as the trust guarantees, except that upon
the occurrence and during the continuation of an event of default under the
trust agreement, holders of trust preferred securities will have priority over
holders of common securities with respect to distributions and payments on
liquidation, redemption or otherwise.

Certain Covenants of Southern Union

         In each trust guarantee, Southern Union will covenant that it will not,
if (1) there shall have occurred any event of which Southern Union has actual
knowledge that (a) with the giving of notice or the lapse of time, or both,
would constitute an event of default under the related indenture and (b) in
respect of which Southern Union shall not have taken reasonable steps to cure,
(2) Southern Union shall be in default with respect to its payment of any
obligations under the trust guarantee, or (3) Southern Union shall have given
notice of its selection of an extension period as provided in the related
indenture and shall not have rescinded such notice, or such extension period, or
any extension thereof, shall be continuing:

         o    declare or pay any dividends or distributions on, or redeem,
              purchase, acquire, or make a liquidation payment with respect to,
              any of Southern Union's capital stock or capital stock of any of
              its subsidiaries that are not wholly-owned (other than any stock
              dividend paid by Southern Union or any of its subsidiaries where
              the dividend stock is of the same type as that on which the
              dividend is bring paid); or

         o    make any payment of principal, interest or premium, if any, on or
              repay or repurchase or redeem any debt securities (including
              guarantees of indebtedness for money borrowed) of Southern Union
              that rank equal or junior to the subordinated debt securities
              (other than (a) any dividend, redemption, liquidation, interest,
              principal or guarantee payment by Southern Union where the payment
              is made by way of securities (including capital stock) that rank
              equal with or junior to the securities on which such dividend,
              redemption, interest, principal or guarantee payment is being
              made, (b) payments under the trust guarantees, (c) as a result of
              a reclassification of Southern Union's capital stock or the
              exchange or conversion of one series or class of Southern Union's
              capital stock for another series or class of Southern Union's
              capital stock, and (d) the purchase of fractional interest in
              shares of Southern Union's capital stock pursuant to the
              conversion or exchange provisions of such capital stock or the
              security being converted or exchanged).

Modification of the Trust Guarantees; Assignment

         Except with respect to any changes which do not materially adversely
affect the rights of holders of trust preferred securities, in which case no
vote will be required, no trust guarantee may be amended without the prior
approval of the holders of not less than 66 % in liquidation amount of the
related outstanding trust preferred securities. The manner of obtaining this
approval of holders of the trust preferred securities will be described in an
accompanying prospectus supplement. All guarantees and agreements contained in a
trust guarantee will bind the successors, assigns, receivers, trustees and
representatives of Southern Union and will inure to the benefit of the holders
of the trust preferred securities then outstanding.


                                      -37-

<PAGE>
Events of Default

         An event of default under a trust guarantee will occur upon Southern
Union's failure to perform any of its payment or other obligations thereunder.
The holders of a majority in liquidation amount of the trust preferred
securities to which the trust guarantee relates have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the guarantee trustee in respect of the guarantee or to direct the exercise of
any trust or power conferred upon the guarantee trustee under the trust
guarantee.

         If the guarantee trustee fails to enforce the trust guarantee, any
holder of the related trust preferred securities may institute a legal
proceeding directly against Southern Union to enforce the guarantee trustee's
rights under the trust guarantee, without first instituting a legal proceeding
against the relevant trust, the guarantee trustee or any other person or entity.
In addition, any holder of trust preferred securities shall have the right,
which is absolute and unconditional, to proceed directly against Southern Union
to obtain guarantee payments, without first waiting to determine if the
guarantee trustee has enforced a guarantee or instituted a legal proceeding
against the trust, the guarantee trustee or any other person or entity. Southern
Union has waived any right or remedy to require that any action be brought just
against the trust, the guarantee trustee or any other person or entity before
proceeding directly against Southern Union.

         Southern Union will be required to provide annually to the guarantee
trustee a statement as to the performance by it of certain of its obligations
under each of the trust guarantees and as to any default in such performance.
Southern Union will required to file annually with the guarantee trustee an
officer's certificate as to its compliance with all conditions under each of the
trust guarantees.

Termination

         Each trust guarantee will terminate and be of no further force and
effect upon the first to occur of:

         o    full payment of the redemption price of all related trust
              preferred securities;

         o    distribution of the subordinated debt securities to the holders of
              the related trust preferred securities in exchange for all the
              related trust preferred securities; or

         o    full payment of the amounts payable upon liquidation of the
              related trust.

         Each trust guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of trust preferred
securities must restore payment of any sums paid under the trust preferred
securities or the trust guarantee.

Status of the Trust Guarantees

         The trust guarantees will constitute unsecured obligations of Southern
Union and will rank:

         o    subordinate and junior in right of payment to all senior
              indebtedness of Southern Union in the same manner as the
              subordinated debt securities (See "Description of the Subordinated
              Debt Securities -- Subordination"); and


                                      -38-

<PAGE>
         o    equally with the related subordinated debt securities and any
              other subordinated debt securities and related trust guarantees
              now or hereafter issued by Southern Union.

         The terms of the trust preferred securities provide that each holder
thereof, by acceptance of the trust preferred securities, agrees to the
subordination provisions and other terms of the related trust guarantee.

         The trust guarantees will constitute a guarantee of payment and not of
collection. Accordingly, the guaranteed party may institute a legal proceeding
directly against the guarantor to enforce its rights under the trust guarantee
without first instituting a legal proceeding against any other person or entity.
The guarantees will be held for the benefit of the holders of the trust
preferred securities. The guarantees will not be discharged except by payment of
the guarantee payments in full to the extent not paid by the related trust or
upon distribution of the subordinated debt securities to the holders of the
trust preferred securities. The guarantees do not place a limitation on the
amount of additional indebtedness that may be incurred by Southern Union.

Information Concerning the Guarantee Trustee

         Prior to the occurrence of a default with respect to a trust guarantee
and after the curing or waiving of all events of default with respect to that
trust guarantee, the guarantee trustee undertakes to perform only those duties
as are specifically set forth in that trust guarantee. In case an event of
default has occurred and has not been cured or waived, the guarantee trustee
will exercise the same degree of care and skill as a prudent individual would
exercise or use in the conduct of his or her own affairs. Subject to these
provisions, the guarantee trustee is under no obligation to exercise any of the
powers vested in it by a trust guarantee at the request of any holder of trust
preferred securities, unless it is offered reasonable indemnity against the
costs, expenses and liabilities which might be incurred through the exercise of
those powers.

         Southern Union and certain of its affiliates may, from time to time,
maintain a banking relationship with the guarantee trustee.

Governing Law

         The trust guarantees will be governed by, and interpreted in accordance
with, the laws of the State of New York.

                          SUBORDINATED DEBT SECURITIES

General Summary

         Following issuance of trust preferred securities by a trust, the trust
will use the proceeds of such issuance to purchase subordinated debt securities
from Southern Union. The subordinated debt securities may be issued in one or
more series. Only one series of subordinated debt securities will be issued to a
particular trust, or the property trustee of such trust. That trust will hold
all of the subordinated debt securities of that series.

         Each series of subordinated debt securities will be issued under the
Subordinated Debt Securities Indenture, dated as of May 10, 1995, between


                                      -39-

<PAGE>
Southern Union and JP Morgan Chase Bank, as the subordinated debt securities
trustee, as supplemented by a supplemental indenture for such series. The
subordinated debt securities indenture, as so supplemented, will be called the
"indenture."

         The following is a summary of the material terms and provisions of the
subordinated debt securities and the indenture. It summarizes only those
portions of the subordinated debt securities and indenture which we believe will
be most important to your decision to invest in the trust preferred securities.
You should keep in mind, however, that it is the indenture, and not this
summary, that defines your rights. There may be other provisions in the
indenture which are also important to you. You should read the indenture itself
for a full description of its terms. Both the indenture and a form of the
supplemental indenture will be made publicly available in a filing we make with
the SEC with respect to any offering we make of subordinated debt securities.
See "Where You Can Find More Information" for information on how to obtain a
copy of the form of the indenture and form of supplemental indenture.

         Each series of subordinated debt securities will be direct, unsecured
obligations of Southern Union. The subordinated debt securities will have a
junior position to all of Southern Union's senior debt securities.

         The subordinated debt securities are issued to a trust or the property
trustee of such trust in connection with the issuance of trust securities by
such trust, such subordinated debt securities may be distributed pro rata to the
holders of such trust securities in connection with the dissolution of such
trust upon the occurrence of certain events described in the prospectus
supplement relating to such trust preferred securities.

         The prospectus supplement with respect to the issuance of trust
preferred securities will include a description of the specific terms of the
subordinated debt securities issued to the trust. These terms will include some
or all of the following:

         o    the title and type of the subordinated debt securities;

         o    the total principal amount and the currency, if other than U.S.
              dollars, in which such subordinated debt securities are
              denominated;

         o    the percentage of the principal amount at which the subordinated
              debt securities will be issued and any payments due if the
              maturity is accelerated;

         o    the date on which the principal will be payable and the terms on
              which any such maturity date may be extended;

         o    the interest rate and the interest payment dates;

         o    any optional redemption provisions;

         o    any sinking fund or other provisions that would obligate Southern
              Union to repurchase or otherwise redeem some or all of the
              subordinated debt securities;

         o    any changes to or additional events of default or covenants;

         o    any special tax implications of the subordinated debt securities,
              including provisions for original issue discount securities, if
              offered;


                                      -40-

<PAGE>
         o    restrictions on the declaration of dividends on Southern Union's
              capital stock (other than dividends in such stock) or requiring
              the maintenance of any asset ratio or the creation or maintenance
              of reserves; and

         o    the rights, if any, to defer payments of interest on the
              subordinated debt securities by extending the interest payment
              period, and the duration of such extensions;

         o    the subordination terms of the subordinated debt securities of
              such series;

         o    any deletions from, modifications of or additions to the events of
              default or covenants with respect to such subordinated debt
              securities, whether or not such events of default or covenants are
              consistent with the events of default or covenants described in
              this prospectus; and

         o    any other terms of such subordinated debt securities.

         For a description of the terms of any series of the subordinated debt
securities, you should refer to the applicable prospectus supplement.

         The indenture does not limit the aggregate principal amount of
subordinated debt securities that Southern Union may issue pursuant to that
indenture. The indenture does not contain any provisions that would limit
Southern Union's ability to incur debt. The indenture does not contain any
provisions that protect the holders of the subordinated debt securities in the
event that Southern Union engages in a highly leveraged transaction or other
transaction in connection with a takeover attempt. Such a transaction could
result in a decline in the credit rating of the subordinated debt securities.

         Under the indenture, Southern Union has the ability to issue debt
securities with terms different from any debt securities it has already issued,
without the consent of the holders of any previously issued series of
subordinated debt securities.

Denominations

         Subordinated debt securities issued to a trust will be issued as
registered securities in denominations and integrals thereof, as will be set
forth in the applicable prospectus supplement.

Subordination

         The subordinated debt securities will be subordinated and junior in
right of payment to the following indebtedness of Southern Union, whether
outstanding on the date of execution of the subordinated debt indenture or
thereafter incurred, created or assumed:

         o    indebtedness of Southern Union for money borrowed by Southern
              Union or evidenced by securities, debentures (other than the
              subordinated debt securities), bonds or similar instruments issued
              by Southern Union, including any of Southern Union's mortgage
              bonds;

         o    capital lease obligations of Southern Union;

         o    obligations of Southern Union incurred for deferring the purchase
              price of property, with respect to conditional sales, or under any
              title retention agreement (but excluding trade accounts payable
              arising in the ordinary course of business);


                                      -41-

<PAGE>
         o    obligations of Southern Union with respect to letters of credit,
              banker's acceptances, security purchase facilities or similar
              credit transitions; and

         o    all indebtedness of others of the type referred to in the four
              preceding clauses assumed by or guaranteed in any manner by
              Southern Union or in effect guaranteed by Southern Union.

Covenants

         Under the subordinated indenture, Southern Union will:

         o    pay the principal of, and interest and any premium on, the
              subordinated debt securities when due;

         o    maintain a place of payment;

         o    deliver a report to the subordinated debt securities trustee at
              the end of each fiscal year reviewing its obligations under the
              indenture; and

         o    deposit sufficient funds with any paying agent on or before the
              due date for any principal, interest or premium.

         For as long as any trust preferred securities are outstanding of either
trust that holds, directly or indirectly through a property trustee of such
trust, any subordinated debt securities, Southern Union will:

         o    directly or indirectly maintain 100% ownership of the common
              securities of such trust; provided, however, that certain
              successors that are permitted under the indenture may succeed to
              Southern Union's ownership of such common securities; and

         o    cause such trust to remain a statutory business trust, except in
              connection with the distribution of subordinated debt securities
              to the holders of trust preferred securities in liquidation of
              such trust, the redemption of all of the trust preferred
              securities of the trust, or certain mergers, consolidations or
              amalgamations, each as permitted by the trust agreement; and

         o    use its reasonable efforts to cause such trust to continue to be
              classified as a grantor trust for United States federal income tax
              purposes.

Consolidations, Mergers and Sales

         The subordinated indenture provides that Southern Union will not
consolidate with or merge with or into any other entity, or convey, transfer or
lease, or permit one or more of its subsidiaries to convey, transfer or lease,
all or substantially all of their properties and assets on a consolidated basis
to any other entity, unless Southern Union is the surviving corporation or:

         o    such other entity assumes by supplemental indenture all of
              Southern Union's obligations under the indenture and the
              subordinated debt securities;

         o    no default or event of default is existing immediately after the
              transaction;

         o    the surviving entity is a corporation, partnership or trust
              organized and validly existing under the laws of the United States
              of America, any state of the United States of America or the
              District of Columbia; and


                                      -42-
<PAGE>
         o    certain other conditions are met.

Liens

         Pursuant to the indenture, Southern Union will not, and will not permit
any of its subsidiaries to, create, incur, issue or assume any debt secured by
any lien on any property or assets owned by Southern Union or any of its
subsidiaries, and Southern Union will not, and will not permit any of its
subsidiaries to, create, incur, issue or assume any debt secured by any lien on
any shares of stock or debt of any subsidiary (such shares of stock or debt of
any subsidiary being called "restricted securities"), unless

         o    in the case of new debt which is expressly by its terms
              subordinate or junior in right of payment to the subordinated debt
              securities, the subordinated debt securities are secured by a lien
              on such property or assets that is senior to the new lien with the
              same relative priority as such subordinated debt has with respect
              to the subordinated debt securities; or

         o    in the case of liens securing new debt that is ranked equally with
              the subordinated debt securities, the subordinated debt securities
              are secured by a lien on such property or assets that is equal and
              ratable with the new lien, except that any lien securing such
              subordinated debt securities may be junior to any lien on Southern
              Union's accounts receivable, inventory and related contract rights
              securing debt under Southern Union's revolving credit facility.

These restrictions do not prohibit Southern Union from creating any of the
following liens:

         (1)  any liens on any of our property, assets or restricted securities
              or those of any subsidiary existing as of the date of the first
              issuance by us of the debt securities issued pursuant to the
              indenture, or such other date as may be specified in a prospectus
              supplement for an applicable series of debt securities issued
              pursuant to the indenture, subject to the provisions of subsection
              (8) below;

         (2)  liens on any property or assets or restricted securities of any
              corporation existing at the time such corporation becomes a
              subsidiary, or arising after such time (a) otherwise than in
              connection with the borrowing of money arranged after the
              corporation became a subsidiary and (b) pursuant to contractual
              commitments entered into prior to and not in contemplation of such
              corporation becoming a subsidiary;

         (3)  liens on any of our property, assets or restricted securities or
              those of any subsidiary existing at the time of acquisition of
              such property, assets or securing the payment of all or any part
              of the purchase price or construction cost of such property,
              assets or restricted securities, or securing any debt incurred
              prior to, at the time of or within 120 days after the later of the
              date of the acquisition of such property, assets or restricted
              securities or the completion of any such construction, for the
              purpose of financing all or any part of the purchase price or
              construction cost;

         (4)  liens on any property or assets to secure all or any part of the
              cost of development, operation, construction, alteration, repair
              or improvement of all or any part of such property or assets or to
              secure debt incurred by us or any of our subsidiaries prior to, at
              the time of or within 120 days after, the completion of such
              development, operation, construction, alteration, repair or
              improvement, whichever is later, for the purpose of financing all
              or any related costs;

                                      -43-
<PAGE>
         (5)  liens in favor of the trustee for the benefit of the holders and
              subsequent holders of the debt securities securing the debt
              securities;

         (6)  liens secured by any of our property or assets or those of any
              subsidiary that comprise no more than 20% of Consolidated Net
              Tangible Assets (as defined under "Terms Described in the
              Indenture" below);

         (7)  liens which secure senior indebtedness owing by a subsidiary to us
              or to another subsidiary; and

         (8)  any extension, renewal, substitution or replacement in whole or in
              part, of any of the liens referred to above or the debt secured by
              the liens; provided that:

              (a)   such extension, renewal, substitution or replacement lien
                    will be limited to all or any part of the same property,
                    assets or restricted securities that secured the prior lien
                    plus improvements on such property and plus any other
                    property or assets not then owned by us or one of our
                    subsidiaries or constituting restricted securities; and

              (b)   in the case of items (1) through (3) above, the debt secured
                    by such lien at such time is not increased.

         If Southern Union gives a guarantee that is secured by a lien on any
property or assets or restricted securities, or creates a lien on any property
or assets or restricted securities to secure debt that existed prior to the
creation of such lien, the indenture will deem that Southern Union has created
debt in an amount equal to the principal amount guaranteed or secured by such
lien. The amount of debt secured by liens on property, assets and restricted
securities will be computed without cumulating the indebtedness with any
guarantee or lien securing the same indebtedness.

Election to Defer Payments of Interest

         Southern Union has the right, at any time during the term of
subordinated debt securities, to defer payment of interest by extending the
interest payment period of the subordinated debt securities for up to 20
consecutive quarters. If Southern Union has given notice of its election to
defer payments or interest on subordinated debt securities issued to a trust or
a related subordinated debt securities trustee by extending the interest payment
period as provided in the indenture, then:

         o    Southern Union will not, and will cause any subsidiary that is not
              its wholly-owned subsidiary not to, declare or pay dividends on,
              or make a distribution with respect to or redeem, purchase or
              acquire, or make a liquidation payment with respect to, any of
              Southern Union's capital stock or the capital stock of any such
              subsidiary; and

         o    Southern Union will not make any payment of interest, principal or
              premium, on or repay, repurchase or redeem any subordinated debt
              securities issued by Southern Union that rank equally with or
              junior to such subordinated debt securities.

The restriction in paragraph (1) above does not apply to any stock dividends
paid by Southern Union, or any of its subsidiaries, where the dividend stock is
the same as the stock on which the dividend is being paid.


                                      -44-

<PAGE>
Events of Default

         The subordinated indenture provides that any one of the following
events is an event of default:

         o    failure to pay any interest due on any subordinated debt security
              for 10 days;

         o    failure to pay the principal of, or any premium on, any
              subordinated debt security when due, whether at maturity, by
              acceleration, upon redemption, by declaration or otherwise;

         o    failure to perform any other covenant or agreement in the
              indenture, which continues for 60 days after written notice is
              given to Southern Union by the subordinated debt securities
              trustee or the holders of at least 25% of the outstanding
              subordinated debt securities of that series;

         o    failure to pay principal of, or premium on, any indebtedness of
              Southern Union or any of its subsidiaries in excess of 10% of
              Southern Union's consolidated net worth (the sum of stockholder's
              equity, preferred stock and minority interests), provided that (i)
              the indebtedness has already become due and payable at its stated
              maturity or (ii) the failure results in the acceleration of the
              maturity of the indebtedness;

         o    the voluntary or involuntary dissolution, winding-up or
              termination of the applicable trust, except in connection with the
              distribution of the related subordinated debt securities to the
              holders of the common securities and the trust preferred
              securities in liquidation or redemption of the common securities
              and trust preferred securities, the redemption of all of the
              related trust preferred securities or certain mergers,
              consolidations or amalgamations permitted by the trust agreement;

         o    certain events in any bankruptcy, insolvency or reorganization of
              Southern Union or its assets; or

         o    any other event of default listed in the supplemental indenture
              for a series of subordinated debt securities.

         Southern Union is required to file annually with the subordinated debt
securities trustee an officer's certificate as to its compliance with all
conditions and covenants under the indenture. The indenture permits the
subordinated debt securities trustee to withhold notice to the holders of
subordinated debt securities of any default, except in the case of a failure to
pay the principal of (or premium, if any), or interest on, such subordinated
debt securities if the subordinated debt securities trustee considers it in the
interest of the holders of subordinated debt securities to do so.

         If an event of default, other than certain events with respect to
Southern Union's bankruptcy, insolvency and reorganization, or the dissolution,
winding-up or termination of the applicable trust, occurs and is continuing with
respect to the subordinated debt securities, the subordinated debt securities
trustee or the holders of at least 25% in principal amount of the outstanding
subordinated debt securities of that series may declare the outstanding
subordinated debt securities of that series due and payable immediately. If
Southern Union's bankruptcy, insolvency or reorganization, or the dissolution,
winding-up or termination of the applicable trust, causes an event of default
for subordinated debt securities of a particular series, then the principal of
all the outstanding subordinated debt securities of that series, and accrued and
unpaid interest thereon, will automatically be due and payable without any act
on the part of the subordinated debt securities trustee or any holder.


                                      -45-
<PAGE>
         If an event of default with respect to a particular series of
subordinated debt securities occurs and is continuing, the subordinated debt
securities trustee will be under no obligation to exercise any of its rights or
powers under the subordinated debt securities indenture at the request or
direction of any of the holders of subordinated debt securities of such series
(other than certain duties listed in the indenture), unless such holders offer
to the subordinated debt securities trustee reasonable indemnity and security
against the costs, expenses and liabilities that might be incurred by the
subordinated debt securities trustee to comply with the holders' request. If
they provide this indemnity to the subordinated debt securities trustee, the
holders of a majority in principal amount of the outstanding subordinated debt
securities of such series will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the subordinated
debt securities trustee under the indenture, or exercising any trust or power
given to the subordinated debt securities trustee with respect to the
subordinated debt securities of that series. The subordinated debt securities
trustee may refuse to follow directions in conflict with law or the indenture
that may subject the subordinated debt securities trustee to personal liability
or may be unduly prejudicial to holders not joining in such directions.

         The holders of not less than a majority in principal amount of any
series of the outstanding subordinated debt securities may, on behalf of the
holders of all the subordinated debt securities of such series waive any past
default under indenture with respect to such series and its consequences (other
than defaults resulting from Southern Union's bankruptcy, insolvency or
reorganization, or the dissolution, winding-up or termination of the applicable
trust, which may be waived by the holders of not less than a majority in
principal amount of all securities outstanding under the indenture), except a
default:

         o    in the payment of the principal of (or premium, if any) or
              interest on any subordinated debt security of any series unless
              such default has been cured and a sum sufficient to pay all
              matured installments of interest and principal due otherwise than
              by acceleration and any subordinated debt securities premium has
              been deposited with the subordinated debt securities trustee; or

         o    in respect of a covenant or provision that cannot be modified or
              amended without the consent of the holder of each outstanding
              subordinated debt security of such series affected by the
              modification or amendment.

Modification or Waiver

         Southern Union and the subordinated debt securities trustee may modify
and amend the indenture with the consent of the holders of not less than a
majority in principal amount of all outstanding subordinated debt securities or
any series of subordinated debt securities that is affected by such modification
or amendment. The consent of the holder of each outstanding subordinated debt
security of a series is required in order to:

         o    change the stated maturity of the principal of (or premium, if
              any), or any installment of principal or interest on any
              subordinated debt security of such series;

         o    reduce the principal amount or the rate of interest on or any
              additional amounts payable, or any premium payable upon the
              redemption of such series;

         o    change Southern Union's obligation to pay additional amounts in
              respect of any subordinated debt security of such series;


                                      -46-

<PAGE>
         o    reduce the amount of principal of a subordinated debt security
              that is an original issue discount security and would be due and
              payable upon a declaration of acceleration of the maturity of that
              subordinated debt security;

         o    adversely affect any right of repayment at the option of the
              holder of any subordinated debt security of such series;

         o    change the place or currency of payment of principal of, or any
              premium or interest on, any subordinated debt security of such
              series;

         o    impair the right to institute suit for the enforcement of any such
              payment on or after the stated maturity of the subordinated debt
              security or any redemption date or repayment date for the
              subordinated debt security;

         o    reduce the percentage of holders of outstanding subordinated debt
              securities of such series necessary to modify or amend the
              indenture or to consent to any waiver under the indenture or
              reduce the requirements for voting or quorum described below;

         o    modify the change of control provisions, if any;

         o    reduce the percentage of outstanding subordinated debt securities
              of such series necessary to waive any past default; or

         o    modify any of the above requirements.

         Southern Union and the subordinated debt securities trustee may modify
and amend the indenture without the consent of any holder for the following
purposes:

         o    to evidence the succession of another entity to Southern Union as
              obligor under the indenture;

         o    to add to Southern Union's covenants for the benefit of the
              holders of all or any series of subordinated debt securities;

         o    to add events of default for the benefit of the holders of all or
              any series of subordinated debt securities;

         o    to add or change any provisions of the subordinated debt
              securities indenture to facilitate the issuance of bearer
              securities;

         o    to change or eliminate any provisions of the indenture but only if
              any such change or elimination will become effective only when
              there are no outstanding subordinated debt securities of any
              series created prior to the change or elimination that is entitled
              to the benefit of such provision;

         o    to establish the form or terms of subordinated debt securities of
              any other series;

         o    secure the subordinated debt securities;

         o    to provide for the acceptance of appointment by a successor
              trustee or facilitate the administration of the trust under the
              indenture by more than one trustee; and

         o    to change the indenture with respect to the authentication and
              delivery of additional series of subordinated debt securities, in
              order to cure any ambiguity, defect or inconsistency in the
              indenture, but only if such action does not adversely affect the
              interest of holders of subordinated debt securities of any series
              in any material respect.


                                      -47-

<PAGE>
         The indenture contains provisions for convening meetings of the holders
of subordinated debt securities of a series if subordinated debt securities of
that series are issuable as bearer securities. A meeting may be called at any
time by the subordinated debt securities trustee, by Southern Union or by the
holders of at least 10% in principal amount of the subordinated debt securities
of such series outstanding. In any case, notice must be given as provided in the
indenture. Any resolution presented at a meeting or duly reconvened adjourned
meeting at which a quorum is present may be adopted by the affirmative vote of
the holders of a majority in principal amount of the subordinated debt
securities of that series, except for any consent that must be given by the
holder of each subordinated debt security affected, as described above in this
section. Any resolution passed or decision made in accordance with the indenture
at any duly held meeting of holders of subordinated debt securities of that
series will be binding on all holders of the subordinated debt securities of
that series. The quorum at any meeting called to adopt a resolution, and at any
reconvened meeting, will consist of persons entitled to vote a majority in
principal amount of the subordinated debt securities of a series outstanding,
unless a specified percentage in principal amount of the subordinated debt
securities of a series outstanding is required for the consent or waiver, then
the persons entitled to vote such specified percentage in principal amount of
the outstanding subordinated debt securities of such series will constitute a
quorum. However, if any action is to be taken at a meeting of holders of
subordinated debt securities of any series with respect to any request, demand,
authorization, direction, notice, consent, waiver or other action that the
indenture expressly provides may be made, given or taken by the holders of a
specified percentage in principal amount of all outstanding subordinated debt
securities affected, or of the holders of such series of subordinated debt
securities and one or more additional series, then:

         o    there will be no minimum quorum requirement for such meeting; and

         o    the principal amount of the outstanding subordinated debt
              securities of such series that vote in favor of such request,
              demand, authorization, direction, notice, consent, waiver or other
              action will be taken into account in determining whether such
              request, demand, authorization, direction, notice, consent, waiver
              or other action has been made, given or taken under the indenture.

Defeasance and Covenant Defeasance

         Southern Union may elect either (i) to defease and be discharged from
any and all obligations with respect to the subordinated debt securities (except
as otherwise provided in the indenture) ("defeasance") or (ii) to be released
from its obligations with respect to certain covenants that are described in the
Indenture ("covenant defeasance"), upon the deposit with the subordinated debt
securities trustee, in trust for such purpose, of money and/or specified
government obligations that through the payment of principal, premium, if any,
and interest in accordance with their terms will provide money in an amount
sufficient, without reinvestment, to pay the principal of, premium, if any, and
interest on the subordinated debt securities of such series to maturity or
redemption, as the case may be, and any mandatory sinking fund or analogous
payments thereon. As a condition to defeasance or covenant defeasance, Southern
Union must deliver to the subordinated debt securities trustee an opinion of
counsel to the effect that the holders of the subordinated debt securities of
such series will not recognize income, gain or loss for United States federal
income tax purposes as a result of such defeasance or covenant defeasance and
will be subject to United States federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such defeasance
or covenant defeasance had not occurred. Such opinion of counsel, in the case of
defeasance under clause (i) above, must refer to and be based upon a ruling of


                                      -48-

<PAGE>
the Internal Revenue Service or a change in applicable United States federal
income tax law occurring after the date of the applicable prospectus supplement.

         Southern Union may exercise its defeasance option with respect to the
subordinated debt securities of any series notwithstanding its prior exercise of
its covenant defeasance option. If Southern Union exercises its defeasance
option, payment of the subordinated debt securities of such series may not be
accelerated because of an event of default. If Southern Union exercises its
covenant defeasance option, payment of the subordinated debt securities of such
series may not be accelerated by reference to any covenant from which Southern
Union is released as described under clause (ii) above. However, if acceleration
were to occur for other reasons, the realizable value at the acceleration date
of the money and government obligations in the defeasance trust could be less
than the principal and interest then due on the subordinated debt securities of
such series, in that the required deposit in the defeasance trust is based upon
scheduled cash flow rather than market value, which will vary depending upon
interest rates and other factors.

Financial Information

         While any of the subordinated debt securities are outstanding, Southern
Union will file with the SEC, to the extent permitted under the Exchange Act,
the annual reports, quarterly reports and other documents otherwise required to
be filed with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act
even if Southern Union stops being subject to those sections, and Southern Union
will also provide to all holders and file with the trustees copies of such
reports and documents within 15 days after filing them with the SEC or, if its
filing such reports and documents with the SEC is not permitted under the
Exchange Act, within 15 days after Southern Union would have been required to
file such reports and documents if permitted, in each case at Southern Union's
cost.

Payment, Registration and Transfer

         Unless Southern Union specifies otherwise in a prospectus supplement,
it will pay principal, interest and any premium on the subordinated debt
securities, and they may be surrendered for payment or transferred, at the
offices of the subordinated debt securities trustee. Southern Union will make
payment on registered subordinated debt securities by checks mailed to the
persons in whose names the subordinated debt securities are registered or by
transfer to an account maintained by the registered holder on days specified in
the indenture or any prospectus supplement. If Southern Union makes subordinated
debt securities payments in other forms, we will specify the form and place in a
prospectus supplement.

         Southern Union will maintain a corporate trust office of the trustee or
another office or agency for the purpose of transferring or exchanging fully
registered subordinated debt securities, without the payment of any service
charge except for any tax or governmental charge.

         The subordinated debt securities issued to a trust or the property
trustee of such trust will be issued as registered subordinated debt securities.
Registered subordinated debt securities will be securities recorded in the
securities register kept at the corporate office of the subordinated debt
securities trustee for the trust that issued that series of securities.
Registered subordinated debt securities will be exchangeable for other
registered subordinated debt securities of the same series and of a like
aggregate principal amount and tenor in different authorized denominations.


                                      -49-

<PAGE>
         In the event of any redemption of subordinated debt securities,
Southern Union will not be required to:

         o    issue, register the transfer of or exchange subordinated debt
              securities of any series during a period beginning at the opening
              of business 15 days before any selection of subordinated debt
              securities of that series to be redeemed and ending at the close
              of business on (a) the day of mailing of the relevant notice of
              redemption if subordinated debt securities of the series are
              issuable only as registered subordinated debt securities, (b) the
              day of mailing of the relevant notice of redemption if the
              subordinated debt securities of the series are also issuable as
              registered subordinated debt securities and there is no
              publication, and (c) the day of the first publication of the
              relevant notice of redemption if the subordinated debt securities
              are issuable as bearer securities;

         o    register the transfer of or exchange any registered security, or
              portion thereof, called for redemption, except the unredeemed
              portion of any registered security being redeemed in part;

         o    issue, register the transfer of or exchange any subordinated debt
              securities that have been surrendered for repayment at the option
              of the holder, except any portion not to be repaid.

         If the subordinated debt securities are distributed to the holders of
the related trust preferred securities, the subordinated debt securities may be
represented by one or more global certificates registered in the name of Cede &
Co., as the nominee of DTC. The depository arrangements for such subordinated
debt securities are expected to be substantially similar to those in effect for
the trust preferred securities. For a description of DTC and the terms of the
depository arrangements relating to payments, transfer, voting rights,
redemptions and other notices and other matters, see "Description of the Trust
Preferred Securities - Book-Entry Only Issuance - The Depositary Trust Company."

Governing Law

         The subordinated debt securities and the indenture will be governed by,
and interpreted in accordance with, the laws of the State of New York.

Information Concerning the Subordinated Debt Securities Trustee

         Prior to the occurrence of a default with respect to the indenture and
after the curing or waiving of all events of default with respect to the
indenture, the subordinated debt securities trustee undertakes to perform only
those duties as are specifically set forth in the indenture. In case an event of
default has occurred and has not been cured or waived, the trustee will exercise
the same degree of care and skill as a prudent individual would exercise or use
in the conduct of his or her own affairs. Subject to these provisions, the
subordinated debt securities trustee is under no obligation to exercise any of
the powers vested in it by the indenture at the request of any holder of
subordinated debt securities unless it is offered reasonable indemnity against
the costs, expenses and liabilities which might be incurred through the exercise
of those powers.

         Southern Union and certain of its affiliates may, from time to time,
maintain a banking relationship with the subordinated debt securities trustee.


                                      -50-

<PAGE>
Miscellaneous

         Southern Union will have the right at all times to assign any of its
rights or obligations under the Southern Union indenture to one of its direct or
indirect wholly-owned subsidiaries. In the event of such an assignment, Southern
Union will remain liable for all of its obligations. The indenture otherwise
will be binding upon and exist for the benefit of the parties to the
subordinated debt securities indenture and their successors and assigns. The
indenture provides that it may not otherwise be assigned by the parties thereto.

                                GLOBAL SECURITIES

Book-Entry, Delivery and Form

         Unless the company issuing the debt securities, trust preferred
securities, warrants, common stock, preferred stock, stock purchase contracts,
stock purchase units or depositary shares (the "securities") indicates
differently in a supplemental prospectus, the securities initially will be
issued in book-entry form and represented by one or more global notes or global
securities (collectively, "global securities"). The global securities will be
deposited with, or on behalf of, The Depositary Trust Company, New York, New
York, as depositary ("DTC"), and registered in the name of Cede & Co., the
nominee of DTC. Unless and until it is exchanged for individual certificates
evidencing securities under the limited circumstances described below, a global
security may not be transferred except as a whole by the depositary to its
nominee or by the nominee to the depositary, or by the depositary or its nominee
to a successor depositary or to a nominee of the successor depositary.

DTC has advised each of the issuing companies that it is:

         o    a limited-purpose trust company organized under the New York
              Banking Law;

         o    a "banking organization" within the meaning of the New York
              Banking Law;

         o    a member of the Federal Reserve System;

         o    a "clearing corporation" within the meaning of the New York
              Uniform Commercial Code; and a "clearing agency" registered
              pursuant to the provisions of Section 17A of the Securities
              Exchange Act of 1934.

         DTC holds securities that its participants deposit with DTC. DTC also
facilitates the settlement among its participants of securities transactions,
including transfers and pledges, in deposited securities through electronic
computerized book-entry changes in participants' accounts, which eliminates the
need for physical movement of securities certificates. "Direct participants" in
DTC include securities brokers and dealers, including underwriters, banks, trust
companies, clearing corporations and other organizations. DTC is owned by a
number of its direct participants and by the New York Stock Exchange, Inc., the
American Stock Exchange LLC and the National Association of Securities Dealers,
Inc. Access to the DTC system is also available to others, which we sometimes
refer to as "indirect participants," that clear transactions through or maintain
a custodial relationship with a direct participant either directly or
indirectly. The rules applicable to DTC and its participants are on file with
the SEC.

         Purchases of securities within the DTC system must be made by or
through direct participants, which will receive a credit for those securities on
DTC's records. The ownership interest of the actual purchaser of a security,
which we sometimes refer to as a "beneficial owner," is in turn recorded on the


                                      -51-

<PAGE>
direct and indirect participants' records. Beneficial owners of securities will
not receive written confirmation from DTC of their purchases. However,
beneficial owners are expected to receive written confirmations providing
details of their transactions, as well as periodic statements of their holdings,
from the direct or indirect participants through which they purchased
securities. Transfers of ownership interests in global securities are to be
accomplished by entries made on the books of participants acting on behalf of
beneficial owners. Beneficial owners will not receive certificates representing
their ownership interests in the global securities except under the limited
circumstances described below.

         To facilitate subsequent transfers, all global securities deposited
with DTC will be registered in the name of DTC's nominee, Cede & Co. The deposit
of securities with DTC and their registration in the name of Cede & Co. will not
change the beneficial ownership of the securities. DTC has no knowledge of the
actual beneficial owners of the securities. DTC's records reflect only the
identity of the direct participants to whose accounts the securities are
credited, which may or may not be the beneficial owners. The participants are
responsible for keeping account of their holdings on behalf of their customers.

         So long as the securities are in book-entry form, you will receive
payments and may transfer securities only through the facilities of the
depositary and its direct and indirect participants. The company issuing the
securities will maintain an office or agency in the Borough of Manhattan, the
City of New York where notices and demands in respect of the securities and the
applicable indenture may be delivered to us and where certificated securities
may be surrendered for payment, registration of transfer or exchange. That
office or agency, with respect to the applicable indenture, will initially be
the office of the trustee which is currently located at 100 Wall Street, Suite
1600, New York, New York 10005, in the case of U.S. Bank Trust National
Association, and 101 Barclay Street, Floor 21, New York, New York 10286, in the
case of The Bank of New York.

         Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants and by direct
participants and indirect participants to beneficial owners will be governed by
arrangements among them, subject to any legal requirements in effect from time
to time.

         Redemption notices will be sent to DTC or its nominee. If less than all
of the securities of a particular series are being redeemed, DTC will determine
the amount of the interest of each direct participant in the securities of such
series to be redeemed in accordance with DTC's procedures.

         In any case where a vote may be required with respect to securities of
a particular series, neither DTC nor Cede & Co. will give consents for or vote
the global securities. Under its usual procedures, DTC will mail an omnibus
proxy to us as soon as possible after the record date. The omnibus proxy assigns
the consenting or voting rights of Cede & Co. to those direct participants to
whose accounts the securities of such series are credited on the record date
identified in a listing attached to the omnibus proxy.

         So long as securities are in book-entry form, the company issuing such
securities will make payments on those securities to the depositary or its
nominee, as the registered owner of such securities, by wire transfer of
immediately available funds. If securities are issued in definitive certificated
form under the limited circumstances described below, the company issuing the
securities will have the option of paying interest by check mailed to the
addresses of the persons entitled to payment or by wire transfer to bank
accounts in the United States designated in writing to the applicable trustee at


                                      -52-

<PAGE>
least 15 days before the applicable payment date by the persons entitled to
payment.

         Principal and interest payments on the securities will be made to Cede
& Co., as nominee of DTC. DTC's practice is to credit direct participants'
accounts on the relevant payment date unless DTC has reason to believe that it
will not receive payment on the payment date. Payments by direct and indirect
participants to beneficial owners will be governed by standing instructions and
customary practices, as is the case with securities held for the account of
customers in bearer form or registered in "street name." Those payments will be
the responsibility of participants and not of DTC or us, subject to any legal
requirements in effect from time to time. Payment of principal and interest to
Cede & Co. is our responsibility, disbursement of payments to direct
participants is the responsibility of DTC and disbursement of payments to the
beneficial owners is the responsibility of direct and indirect participants.

         Except under the limited circumstances described below, purchasers of
securities will not be entitled to have securities registered in their names and
will not receive physical delivery of securities. Accordingly, each beneficial
owner must rely on the procedures of DTC and its participants to exercise any
rights under the securities and the applicable indenture.

         The laws of some jurisdictions may require that some purchasers of
securities take physical delivery of securities in definitive form. Those laws
may impair the ability to transfer or pledge beneficial interests in securities.

         DTC is under no obligation to provide its services as depositary for
the securities and may discontinue providing its services at any time. Neither
the company issuing the securities nor the applicable trustee will have any
responsibility for the performance by DTC or its direct participants or indirect
participants under the rules and procedures governing DTC.As noted above,
beneficial owners of a particular series of securities generally will not
receive certificates representing their ownership interests in those securities.
However, if DTC notifies the company issuing such securities that it is
unwilling or unable to continue as a depositary for the global security or
securities representing such series of securities or if DTC ceases to be a
clearing agency registered under the Securities Exchange Act at a time when it
is required to be registered and a successor depositary is not appointed within
90 days of the notification to us or of our becoming aware of DTC's ceasing to
be so registered, as the case may be; the company issuing such securities
determines, in its sole discretion, not to have such securities represented by
one or more global securities; or an Event of Default under the indenture has
occurred and is continuing with respect to such series of securities, the
company issuing such securities will prepare and deliver certificates for such
securities in exchange for beneficial interests in the global securities. Any
beneficial interest in a global security that is exchangeable under the
circumstances described in the preceding sentence will be exchangeable for
securities in definitive certificated form registered in the names that the
depositary directs. It is expected that these directions will be based upon
directions received by the depositary from its participants with respect to
ownership of beneficial interests in the global securities.

         Each company has obtained the information in this section and elsewhere
in this prospectus concerning DTC and DTC's book-entry system from sources that
are believed to be reliable, but neither company takes responsibility for the
accuracy of this information.


                                      -53-

<PAGE>
                                     EXPERTS

         The consolidated financial statements incorporated in this Prospectus
by reference to the Annual Report on Form 10-K for the year ended June 30, 2002,
have been so incorporated in reliance on the report of PricewaterhouseCoopers
LLP, independent accountants, given on the authority of said firm as experts in
auditing and accounting.

                  VALIDITY OF THE SECURITIES AND THE GUARANTEES

         Unless stated otherwise in the applicable prospectus supplement, the
validity of the securities offered hereby and the guarantees will be passed upon
for us by Fleischman and Walsh, L.L.P., Washington, D.C.  Aaron I. Fleischman,
Senior Partner of Fleischman and Walsh, L.L.P., and other attorneys in that firm
beneficially own shares of common stock that, in the aggregate, represent less
than one percent (1%) of the outstanding shares of common stock of Southern
Union. Certain United States federal income taxation matters will be passed upon
for Southern Union, Southern Union Financing II and Southern Union Financing III
by special tax counsel to the Company and the Trusts when appropriate with
respect to any particular offering.

                              PLAN OF DISTRIBUTION

         We may sell the securities described in this prospectus from time to
time in one or more transactions

         (a)   to purchasers directly;

         (b)   to underwriters for public offering and sale by them;

         (c)   through agents;

         (d)   through dealers: or

         (e)   through a combination of any of the foregoing methods of sale.

         We may distribute the securities from time to time in one or more
transactions at;

         (a)   a fixed price or prices, which may be changed;

         (b)   market prices prevailing at the time of sale;

         (c)   prices related to such prevailing market prices; or

         (d)   negotiated prices.

Direct Sales

         We may sell the securities directly to institutional investors or
others. A prospectus supplement will describe the terms of any sale of
securities we are offering hereunder.

To Underwriters

         The applicable prospectus supplement will name any underwriter involved
in a sale of securities. Underwriters may offer and sell securities at a fixed
price or prices, which may be changed, or from time to time at market prices or
at negotiated prices. Underwriters may be deemed to have received compensation


                                      -54-

<PAGE>
from us from sales of securities in the form of underwriting discounts or
commissions and may also receive commissions from purchasers of securities for
whom they may act as agent.

         Underwriters may sell securities to or through dealers, and such
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions (which may be changed from
time to time) from the purchasers for whom they may act as agent.

         Unless otherwise provided in a prospectus supplement, the obligations
of any underwriters to purchase securities or any series of securities will be
subject to certain conditions precedent, and the underwriters will be obligated
to purchase all such securities if any are purchased.

Through Agents and Dealers

         We will name any agent involved in a sale of securities, as well as any
commissions payable by us to such agent, in a prospectus supplement. Unless we
indicate differently in the prospectus supplement, any such agent will be acting
on a reasonable efforts basis for the period of its appointment.

         If we utilize a dealer in the sale of the securities being offered
pursuant to this prospectus, we will sell the securities to the dealer, as
principal. The dealer may then resell the securities to the public at varying
prices to be determined by the dealer at the time of resale.

Delayed Delivery Contracts

         If we so specify in the applicable prospectus supplement, we will
authorize underwriters, dealers and agents to solicit offers by certain
institutions to purchase securities pursuant to contracts providing for payment
and delivery on future dates. Such contracts will be subject to only those
conditions set forth in the applicable prospectus supplement.

         The underwriters, dealers and agents will not be responsible for the
validity or performance of the contracts. We will set forth in the prospectus
supplement relating to the contracts the price to be paid for the securities,
the commissions payable for solicitation of the contracts and the date in the
future for delivery of the securities.

General Information

         Underwriters, dealers and agents participating in a sale of the
securities may be deemed to be underwriters as defined in the Securities Act,
and any discounts and commissions received by them and any profit realized by
them on resale of the securities may be deemed to be underwriting discounts and
commissions, under the Securities Act. We may have agreements with underwriters,
dealers and agents to indemnify them against certain civil liabilities,
including liabilities under the Securities Act, and to reimburse them for
certain expenses.

         Underwriters or agents and their associates may be customers of, engage
in transactions with or perform services for us or our affiliates in the
ordinary course of business.

         Unless we indicate differently in a prospectus supplement, we will not
list the securities on any securities exchange, other than shares of our common
stock. The securities, except for our common stock, will be a new issue of


                                      -55-

<PAGE>
securities with no established trading market. Any underwriters that purchase
securities for public offering and sale may make a market in such securities,
but such underwriters will not be obligated to do so and may discontinue any
market making at any time without notice. We make no assurance as to the
liquidity of or the trading markets for any securities.


                                   -56-

<PAGE>
                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14.     Other Expenses of Issuance and Distribution.

Securities and Exchange Commission Filing Fee...............     $   73,600
Rating Agency Fees..........................................     $  150,000
Blue Sky Fees and Expenses..................................     $   20,000
Trustee's Expenses..........................................     $   10,000
Printing and Engraving Fees.................................     $   50,000
Accounting Fees and Expenses................................     $   65,000
Legal Fees and Expenses.....................................     $  175,000
Miscellaneous...............................................     $   25,000
                                                                 ----------
                                              TOTAL              $  568,600
                                                                 ==========

All of the above except the Securities and Exchange Commission registration fee
(previously paid) are estimated.

Item 15.     Indemnification of Directors and Officers.

         Section 145 of the General Corporation Law of Delaware empowers a
corporation to indemnify its directors and officers, subject to certain
limitations. Southern Union's Bylaws require Southern Union to indemnify its
respective directors and officers to the fullest extent permitted by law.

         Article TWELFTH of the Restated Certificate of Incorporation of
Southern Union eliminates personal liability of directors to the fullest extent
permitted by Delaware law. Section 145 of the Delaware General Corporation Law
provides that a Delaware corporation may indemnify any person against expenses,
fines and settlements actually and reasonably incurred by any such person in
connection with a threatened, pending or completed action, suit or proceeding in
which he is involved by reason of the fact that he is or was a director,
officer, employee or agent of such corporation, provided that (i) he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation and (ii) with respect to any criminal action
or proceeding, he had no reasonable cause to believe his conduct was unlawful.
If the action or suit is by or in the name of the corporation, the corporation
may indemnify any such person against expenses actually and reasonably incurred
by him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, except that no indemnification
may be made in respect to any claim, issue or matter as to which such person
shall have been adjudged to be liable for negligence or misconduct in the
performance of his duty to the corporation, unless and only to the extent that
the Delaware Court of Chancery or the court in which the action or suit is
brought determines upon application that, despite the adjudication of liability
but in light of the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expense as the court deems proper.

         The directors and officers of Southern Union are covered by insurance
policies indemnifying against certain liabilities, including certain liabilities
arising under the Securities Act of 1933, as amended (the "Securities Act"),
which might be incurred by them in such capacities and against which they cannot
be indemnified by Southern Union. Southern Union has entered into an
Indemnification Agreement with each member of its Board of Directors. The
Indemnification Agreement provides the Directors with the contractual right to


                                      II-1

<PAGE>
indemnification for any acts taken in their capacity as a director of Southern
Union to the fullest extent permitted under Delaware law.

         Under each trust agreement, no Trustee, affiliate of a Trustee,
officer, director, shareholder, member, partner, employee, representative or
agent of the Trustee, or any employee or agent of the Trust or its affiliates
(each, an "Indemnified Person") shall be liable, responsible or accountable in
damages or otherwise to the Trust or to any officer, director, shareholder,
member, partner, employee, representative or agent of either the Trust or the
Trust's affiliates or to any holder of Trust Common Securities or Trust
Preferred Securities (each, a "Covered Person") for any loss, damage or claim
incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith and in a manner such Indemnified Person
reasonably believed to be within the scope of the authority conferred upon such
Indemnified Person by the trust agreement or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim incurred by reason of
such Indemnified Person's gross negligence (or, in the case of the Property
Trustee, negligence) or willful misconduct with respect to such acts or
omissions.

         Any agents, dealers or underwriters who execute any of the agreements
filed as Exhibit 1.1 to this registration statement will agree to indemnify
Southern Union's directors and their officers who signed the registration
statement against certain liabilities that may arise under the Securities Act
with respect to information furnished to Southern Union by or on behalf of any
such indemnifying party.

Item 16.     Exhibits.

         Exhibits identified below in parentheses are on file with the SEC and
are incorporated herein by reference to such previous filings. All other
exhibits are provided as part of this electronic transmission.

Exhibit                                 Document
-------    ---------------------------------------------------------------------

  (1)      Underwriting Agreements
           -----------------------

  1.1      - Form of Underwriting Agreement for offering trust preferred
           securities (Southern Union Financing II and Southern Union Financing
           III).*

  1.2      - Form of Underwriting Agreement for offering debt securities
           (Southern Union Company).*

  1.3      - Form of Underwriting Agreement for offering preferred stock
           (Southern Union Company).*

  1.4      -Form of Underwriting Agreement for offering common stock (Southern
           Union Company).*

  1.5      -Form of Underwriting Agreement for offering stock purchase units
           (Southern Union Company).*

  (4)      Instruments Defining the Rights of Security Holders, Including
           --------------------------------------------------------------
           Indentures
           ----------

  4.1      - Form of Senior Debt Securities Indenture between Southern Union
           Company and JP Morgan Chase Bank (as successor to the Chase Manhattan
           Bank, N.A.), as Trustee.  (Filed as Exhibit 4.1 to Southern Unions'
           Current Report on Form 8-K dated February 15, 1994 and incorporated
           herein by reference.)

  4.2      - Form of Subordinated Debt Securities Indenture between Southern
           Union Company and JP Morgan Chase Bank (as successor to The Chase
           Manhattan Bank, N.A.), as Trustee.  (Filed as Exhibit 4-G to Southern
           Union's Registration Statement on Form S-3 (No. 33-58297) and
           incorporated herein by reference).

  4.3      - Certificate of Trust of Southern Union Financing II (previously
           filed as Exhibit 4-B to Southern Union's Registration Statement on
           Form S-3 (No. 33-58297) and incorporated herein by reference).


                                      II-2

<PAGE>
  4.4      - Certificate of Trust of Southern Union Financing III (previously
           filed as Exhibit 4-C to Southern Union's Registration Statement on
           Form S-3 (No. 33-58297) and incorporated herein by reference).

  4.5      - Form of Trust Agreement (Amended and Restated Declaration of Trust)
           of Southern Union Financing II.*

  4.6      - Form of Trust Agreement (Amended and Restated Declaration of Trust)
           of Southern Union Financing III.*

  4.7      - Forms of Supplemental Indenture to Subordinated Debt Securities
           Indenture issued in connection with Southern Union Financing II
           and Southern Union Financing III Trust Preferred Securities.*

  4.8      - Form of Subordinated Debt Security (included in Exhibit 4.7).*

  4.9      - Form of Trust Preferred Security for Southern Union Financing II
           (included in Exhibit 4.5).*

  4.10     - Form of Trust Preferred Security for Southern Union Financing III
           (included in Exhibit 4.6).*

  4.11     - Form of Guarantee with respect to Trust Preferred Securities.*

  4.12     - Form of Warrant Agreement.*

  4.13     - Form of Warrant Certificate (included in Exhibit 4.12).*

  4.14     - Form of Deposit Agreement.*

  4.15     - Form of Depositary Receipt(included in Exhibit 4.14).*

  4.16     - Form of Purchase Contract.*

  4.17     - Form of Purchase Unit.*

  (5)      Opinion re Legality
           -------------------

  5.1      - Opinion of Fleischman and Walsh, L.L.P., including the consent of
           such firm.*

  (8)      Opinion re Tax Matters
           ----------------------

  8.1      - Opinion of special tax counsel to Southern Union Company as to
           certain federal income taxation matters, including the consent of
           such firm.*

  (12)     Statements re Computation of Ratios
           -----------------------------------

  12.1     - Computation of Ratio of Earnings to Fixed Charges of Southern Union
           Company.

  12.2     - Proforma Ratio of Earnings to Fixed Charges.*

  (23)     Consents of Experts and Counsel
           -------------------------------

  23.1     - Consent of Independent Accountants, PricewaterhouseCoopers LLP.

  23.2     - Consent of Fleischman and Walsh, L.L.P. will be contained in the
           opinion of counsel filed as Exhibit 5.1.*

  23.3     - Consent of special tax counsel to Soutnern Union Company will be
           contained in the opinion of counsel filed as Exhibit 8.1.*

  (24)     Powers of Attorney
           ------------------

  24.1     - Power of Attorney of the Directors of Southern Union Company.

  (25)     Statements of Eligibility of Trustees
           -------------------------------------

  25.1     - Statement of Eligibility under the Trust Indenture Act of 1939, as
           amended, of JP Morgan Chase Bank, as Trustee under the Senior Debt
           Securities Indenture.*


                                      II-3

<PAGE>
  25.2     - Statement of Eligibility under the Trust Indenture Act of 1939, as
           amended, of JP Morgan Chase Bank, as Trustee under the Subordinated
           Debt Securities Indenture.*

  25.3     - Statement of Eligibility under the Trust Indenture Act of 1939,
           as amended, of Wilmington Trust Company, as Trustee under the Trust
           Agreement (Amended and Restated Declaration of Trust) of Southern
           Union Financing II.*

  25.4     - Statement of Eligibility under the Trust Indenture Act of 1939,
           as amended, of Wilmington Trust Company, as Trustee under the Trust
           Agreement (Amended and Restated Declaration of Trust) of Southern
           Union Financing III.*

  25.5     - Statement of Eligibility under the Trust Indenture Act of 1939, as
           amended, of Wilmington Trust Company, as Trustee of the trust
           guarantees of Southern Union for the benefit of the holders of trust
           preferred securities of Southern Union Financing II.*

  25.6     - Statement of Eligibility under the Trust Indenture Act of 1939, as
           amended, of Wilmington Trust Company, as Trustee of the trust
           guarantees of Southern Union for the benefit of the holders of trust
           preferred securities of Southern Union Financing III.*

* To be filed by amendment or by Issuer as part of a current report on Form 8-K

Item 17.  Undertaking.

         Each of the Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of Southern
Union's Annual Report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

         Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that, in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

         Each of the Registrants hereby undertakes:

         (1)   To file, during any period in which offers or sales are being
               made, a post-effective amendment to this Registration Statement:

               (i)   To include any prospectus required by Section 10(a)(3)of
                     the Securities Act.

                                      II-4
<PAGE>
               (ii)  To reflect in the prospectus any facts or events arising
                     after the effective date of the Registration Statement (or
                     the most recent post-effective amendment thereof) that,
                     individually or in the aggregate, represent a fundamental
                     change in the information set forth in the Registration
                     Statement.  Notwithstanding the foregoing, any increase or
                     decrease in volume of securities offered (if the total
                     dollar value of securities offered would not exceed that
                     which was registered) and any deviation from the low or
                     high end of the estimated maximum offering range may be
                     reflected in the form of prospectus filed with the
                     Commission pursuant to Rule 424(b) if, in the aggregate,
                     the changes in volume and price represent no more than 20
                     percent change in the maximum aggregate offering price set
                     forth in the "Calculation of Registration Fee" table in the
                     effective registration statement.

               (iii) To include any material information with respect to the
                     Plan of Distribution not previously disclosed in the
                     Registration Statement or any material change to such
                     information in the Registration Statement.

         (2)   That, for the purpose of determining any liability under the
               Securities Act, each such post-effective amendment shall be
               deemed to be a new registration statement relating to the
               securities offered therein, and the offering of such securities
               at that time shall be deemed to be the initial bona fide offering
               thereof.

         (3)   To remove from registration by means of a post-effective
               amendment any of the securities being registered which remain
               unsold at the termination of the offering.

         Each of the Registrants hereby undertakes that:

         (1)   For purposes of determining any liability under the Securities
               Act, the information omitted from the form of prospectus filed
               as part of this registration statement in reliance upon Rule
               430A and contained in the form of prospectus filed by the
               registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under
               the Securities Act shall be deemed to be part of the registration
               statement as of the time it was declared effective.

         (2)   For the purposes of determining any liability under the
               Securities Act, each post-effective amendment that contains a
               form of prospectus shall be deemed to be a new registration
               statement relating to the securities offered therein, and the
               offering of such securities at that time shall be deemed to be
               the initial bona fide offering thereof.


                                      II-5

<PAGE>
                                   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, Southern
Union Company certifies that it has reasonable grounds to believe that it meets
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wilkes-Barre, State of Pennsylvania, on January 7,
2003.

                                 SOUTHERN UNION COMPANY


                                 By:  /s/ DAVID J. KVAPIL
                                      -------------------
                                      David J. Kvapil
                                      Executive Vice President and
                                      Chief Financial Officer

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities indicated
on January 7, 2003.

         Signature/Name                           Title
--------------------------------  ----------------------------------------------

GEORGE L. LINDEMANN*              Chief Executive Officer and Director

JOHN E. BRENNAN*                  Director

FRANK W. DENIUS*                  Director

THOMAS F. KARAM*                  President and Chief Operating Officer,
                                  Director

DAVID BRODSKY*                    Director

KURT A. GITTER, M.D.*             Director

ADAM M. LINDEMANN*                Director

ROGER J. PEARSON*                 Director

GEORGE ROUNTREE, III*             Director

RONALD M. SIMMS*                  Director

/s/ DAVID J. KVAPIL               Executive Vice President and Chief Financial
-------------------               Officer (Principal Accounting Officer)
David J. Kvapil


*by /s/ David J. Kvapil
-----------------------
Attorney-in-fact


                                      II-6

<PAGE>
                                   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, each of
Southern Union Financing Trust II and Southern Union Financing Trust III
certifies that it has reasonable grounds to believe that they meet the
requirements for filing on Form S-3 and have duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
/authorized, in the City of Wilkes-Barre, State of Pennsylvania, on
January 6, 2003.

                                    SOUTHERN UNION FINANCING II


                                    By:  /s/ DAVID J. KVAPIL
                                         -------------------
                                         David J. Kvapil
                                         Trustee


                                    By:  /s/ DENNIS K. MORGAN
                                         --------------------
                                         Dennis K. Morgan
                                         Trustee


                                    SOUTHERN UNION FINANCING III


                                    By:  /s/ DAVID J. KVAPIL
                                         -------------------
                                         David J. Kvapil
                                         Trustee


                                    By:  /s/ DENNIS K. MORGAN
                                         --------------------
                                         Dennis K. Morgan
                                         Trustee


                                      II-7

<PAGE>
                                  EXHIBIT INDEX


Exhibit                                 Document
-------    ---------------------------------------------------------------------

  (1)      Underwriting Agreements
           -----------------------

  1.1      - Form of Underwriting Agreement for offering trust preferred
           securities (Southern Union Financing II and Southern Union Financing
           III).*

  1.2      - Form of Underwriting Agreement for offering debt securities
           (Southern Union Company).*

  1.3      - Form of Underwriting Agreement for offering preferred stock
           (Southern Union Company).*

  1.4      -Form of Underwriting Agreement for offering common stock (Southern
           Union Company).*

  1.5      -Form of Underwriting Agreement for offering stock purchase units
           (Southern Union Company).*

  (4)      Instruments Defining the Rights of Security Holders, Including
           --------------------------------------------------------------
           Indentures
           ----------

  4.1      - Form of Senior Debt Securities Indenture between Southern Union
           Company and JP Morgan Chase Bank (as successor to the Chase Manhattan
           Bank, N.A.), as Trustee.  (Filed as Exhibit 4.1 to Southern Unions'
           Current Report on Form 8-K dated February 15, 1994 and incorporated
           herein by reference.)

  4.2      - Form of Subordinated Debt Securities Indenture between Southern
           Union Company and JP Morgan Chase Bank (as successor to The Chase
           Manhattan Bank, N.A.), as Trustee.  (Filed as Exhibit 4-G to Southern
           Union's Registration Statement on Form S-3 (No. 33-58297) and
           incorporated herein by reference).

  4.3      - Certificate of Trust of Southern Union Financing II (previously
           filed as Exhibit 4-B to Southern Union's Registration Statement on
           Form S-3 (No. 33-58297) and incorporated herein by reference).

  4.4      - Certificate of Trust of Southern Union Financing III (previously
           filed as Exhibit 4-C to Southern Union's Registration Statement on
           Form S-3 (No. 33-58297) and incorporated herein by reference).

  4.5      - Form of Trust Agreement (Amended and Restated Declaration of Trust)
           of Southern Union Financing II.*

  4.6      - Form of Trust Agreement (Amended and Restated Declaration of Trust)
           of Southern Union Financing III.*

  4.7      - Forms of Supplemental Indenture to Subordinated Debt Securities
           Indenture issued in connection with Southern Union Financing II
           and Southern Union Financing III Trust Preferred Securities.*

  4.8      - Form of Subordinated Debt Security (included in Exhibit 4.7).*

  4.9      - Form of Trust Preferred Security for Southern Union Financing II
           (included in Exhibit 4.5).*

  4.10     - Form of Trust Preferred Security for Southern Union Financing III
           (included in Exhibit 4.6).*

  4.11     - Form of Guarantee with respect to Trust Preferred Securities.*

  4.12     - Form of Warrant Agreement.*

  4.13     - Form of Warrant Certificate (included in Exhibit 4.12).*

  4.14     - Form of Deposit Agreement.*

  4.15     - Form of Depositary Receipt(included in Exhibit 4.14).*


                                      II-8

<PAGE>
Exhibit                                 Document
-------    ---------------------------------------------------------------------

  4.16     - Form of Purchase Contract.*

  4.17     - Form of Purchase Unit.*

  (5)      Opinion re Legality
           -------------------

  5.1      - Opinion of Fleischman and Walsh, L.L.P., including the consent of
           such firm.*

  (8)      Opinion re Tax Matters
           ----------------------

  8.1      - Opinion of special tax counsel to Southern Union Company as to
           certain federal income taxation matters, including the consent of
           such firm.*

  (12)     Statements re Computation of Ratios
           -----------------------------------

  12.1     - Computation of Ratio of Earnings to Fixed Charges of Southern Union
           Company.

  12.2     - Proforma Ratio of Earnings to Fixed Charges.*

  (23)     Consents of Experts and Counsel
           -------------------------------

  23.1     - Consent of Independent Accountants, PricewaterhouseCoopers LLP.

  23.2     - Consent of Fleischman and Walsh, L.L.P. will be contained in the
           opinion of counsel filed as Exhibit 5.1.*

  23.3     - Consent of special tax counsel to Southern Union Company will be
           contained in the opinion of counsel filed as Exhibit 8.1.*

  (24)     Powers of Attorney
           ------------------

  24.1     - Power of Attorney of the Directors of Southern Union Company.

  (25)     Statements of Eligibility of Trustees
           -------------------------------------

  25.1     - Statement of Eligibility under the Trust Indenture Act of 1939, as
           amended, of JP Morgan Chase Bank, as Trustee under the Senior Debt
           Securities Indenture.*

  25.2     - Statement of Eligibility under the Trust Indenture Act of 1939, as
           amended, of JP Morgan Chase Bank, as Trustee under the Subordinated
           Debt Securities Indenture.*

  25.3     - Statement of Eligibility under the Trust Indenture Act of 1939,
           as amended, of Wilmington Trust Company, as Trustee under the Trust
           Agreement (Amended and Restated Declaration of Trust) of Southern
           Union Financing II.*

  25.4     - Statement of Eligibility under the Trust Indenture Act of 1939,
           as amended, of Wilmington Trust Company, as Trustee under the Trust
           Agreement (Amended and Restated Declaration of Trust) of Southern
           Union Financing III.*

  25.5     - Statement of Eligibility under the Trust Indenture Act of 1939, as
           amended, of Wilmington Trust Company, as Trustee of the trust
           guarantees of Southern Union for the benefit of the holders of trust
           preferred securities of Southern Union Financing II.*

  25.6     - Statement of Eligibility under the Trust Indenture Act of 1939, as
           amended, of Wilmington Trust Company, as Trustee of the trust
           guarantees of Southern Union for the benefit of the holders of trust
           preferred securities of Southern Union Financing III.*

* To be filed by amendment or by Issuer as part of a periodic report or a
  current report on Form 8-K


                                      II-9

<PAGE>
                                                                    Exhibit 12.1


                       RATIO OF EARNINGS TO FIXED CHARGES



                 Three Months                 Year Ended June 30,
                    Ended       ------------------------------------------------
                 September 30,
                     2002         2002      2001      2000      1999      1998
                 -------------  --------  --------  --------  --------  --------
                                         (thousands of dollars)

EARNINGS:
  Consolidated
    pre-tax
    income
    (loss) from
    continuing
    operations..   $ (10,408)   $ 34,732  $ 96,683  $ 19,434  $ 17,554  $ 20,213
  Interest......      23,566     101,205   112,999    60,972    45,479    44,364
  Net amortiza-
    tion of
    debt dis-
    count and
    premium and
    issuance
    expense.....         730       2,936     3,118     1,242       965     1,029
  Interest por-
    tion of
    rental
    expense.....         740       2,962     3,724     3,849     2,805     2,213
                   ---------    --------  --------  --------  --------  --------
Earnings(loss)..   $  14,628     141,835   216,524    85,497    66,803    67,819

                   =========    ========  ========  ========  ========  ========

FIXED CHARGES:
  Interest......   $  23,566    $101,205  $112,999  % 60,972  $ 45,479  $ 44,364
  Net amortiza-
    tion of debt
    discount and
    premium and
    issuance
    expense.....         730       2,936     3,118     1,242       965     1,029
  Interest por-
    tion of
    rental
    expense.....         740       2,962     3,724     3,849     2,805     2,213
                   ---------    --------  --------  --------  --------  --------
Fixed Charges...   $  25,036    $107,103  $119,841  $ 66,063  $ 49,249  $ 47,606
                   =========    ========  ========  ========  ========  ========


Ratio of
  earnings to
  fixed charges.   $      --(a) $   1.32  $   1.81  $   1.29  $   1.36  $   1.42
                   =========    ========  ========  ========  ========  ========

(a)  The earnings were inadequate to cover fixed charges by approximately $10.4
million for the three-month period ended September 30, 2002.  Due to the
seasonal nature of the gas utility business, the three-month period ending
September 30 is typically a loss period.

<PAGE>
                                                                    EXHIBIT 23.1

                       CONSENT OF INDEPENDENT ACCOUNTANTS



We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated September 17, 2002 relating to the
financial statements which appears in Southern Union Company's Annual Report on
Form 10-K for the year ended June 30, 2002.  We also consent to the reference to
us under the heading "Experts" in such Registration Statement.



PricewaterhouseCoopers LLP


Philadelphia, Pennsylvania
January 6, 2003


<PAGE>
                                                                    EXHIBIT 24.1

                                POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints Thomas F. Karam, Dennis K. Morgan and
David J. Kvapil, acting individually or together, as such person's true and
lawful attorney(s)-in-fact and agent(s), with full power of substitution and
revocation, to act in any capacity for such person and in such person's name,
place, and stead in executing a Registration Statement on Form S-3 and any
amendments thereto, and filing said Registration Statement, together with all
exhibits thereto and any other documents connected therewith, with the
Securities and Exchange Commission for the purpose of registering debt
securities of Southern Union Company.


Dated:  January 2, 2003



/s/ GEORGE L. LINDEMANN                      /s/ JOHN E. BRENNAN
----------------------------------------     -----------------------------------
George L. Lindemann                          John E. Brennan


/s/ FRANK W. DENIUS                          /s/ THOMAS F. KARAM
----------------------------------------     -----------------------------------
Frank W. Denius                              Thomas F. Karam


/s/ DAVID BRODSKY                            /s/ KURT A. GITTER
----------------------------------------     -----------------------------------
David Brodsky                                Kurt A. Gitter


/s/ ADAM M. LINDEMANN                        /s/ ROGER J. PEARSON
----------------------------------------     -----------------------------------
Adam M. Lindemann                            Roger J. Pearson


/s/ GEORGE ROUNTREE, III                     /s/ RONALD W. SIMMS
----------------------------------------     -----------------------------------
George Rountree, III                         Ronald W. Simms



<PAGE>