Registration No. 333- __________

     As filed with the Securities and Exchange Commission on October 19, 2001
    ========================================================================
                       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

 (Exact name of Registrant     (State or other Jurisdiction    (I.R.S. Employer
as specified in its Charter)    of Incorporation or Organi-     Identification
                                         zation)                   Number)

                          504 Lavaca Street, Suite 800
                               Austin, Texas 78701
                                 (512) 477-5852
               (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.,
            504 Lavaca Street                            Suite 600
                Suite 800                        Washington, D. C.  20036
           Austin, Texas 78701                        (202) 939-7911
             (512) 477-5852

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

          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.
                            ------------------------

     If the only securities being registered on this Form are being offered
     pursuant to dividend or interest reinvestment plans, please check the
                             following blank: _____


        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 blank: X



<PAGE>



                         CALCULATION OF REGISTRATION FEE


                                   Proposed          Proposed
Title of Each                      Maximum           Maximum
Each Class of                      Offering         Aggregate        Amount of
Securities to    Amount to be      Price Per         Offering       Registration
be Registered   Registered (1)   Unit (1)(2)(3)   Price (1)(2)(3)    Fee (2)(4)
-------------   --------------   --------------   ---------------   ------------

Senior Debt
Securities of
Southern Union
Company          $400,000,000         100%         $400,000,000       $100,000

(1)  Such indeterminate principal amount of Senior Debt Securities of Southern
     Union Company as may from time to time be issued at indeterminate prices.

(2)  Estimated solely for the purpose of calculating the registration fee
     pursuant to Rule 457. The aggregate public offering price of the Senior
     Debt Securities of Southern Union Company registered hereby will not exceed
     $400,000,000.

(3)  Exclusive of accrued interest and distributions, if any.

(4)  Pursuant to Rule 429 under the Securities Act of 1933, Southern Union is
     carrying forward $100,000,000 of securities previously registered on its
     Registration Statement on Form S-3, File No. 333-87617, none of which have
     been issued or sold and for which it has paid $27,800 of registration fees
     at the then-effective rate, which are being applied in lieu of $25,000 of
     registration fees due at the present rate for the securities registered by
     this Registration Statement.

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 Statement on Form
S-3 (File No. 333-87617) and not issued, which other Registration Statement, as
amended, previously filed by Southern Union Company has been declared effective.

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






--------------------------------------------------------------------------------



<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 __________, 2001


PROSPECTUS
                                  $400,000,000

                             SOUTHERN UNION COMPANY
                             Senior Debt Securities


Southern Union Company may offer and sell in one or more offerings unsecured
senior debt securities consisting of notes or other evidence of indebtedness in
one or more series.

The aggregate initial offering price of the securities that we offer by this
prospectus will not exceed $400,000,000. We will offer the securities in
amounts, at prices and on terms to be determined by market conditions at the
time of our offerings. We will provide the specific terms of the securities in
supplements to this prospectus. You should read the prospectus and the
prospectus supplements carefully before you invest in any of our securities.
This prospectus may not be used to consummate sales of our securities unless it
is accompanied by a prospectus supplement.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED WHETHER
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

The date of this Prospectus is _________, 2001.





<PAGE>



                                TABLE OF CONTENTS



                                                                          Page
                                                                         Number

About this Prospectus..............................................
Cautionary Statement Regarding Forward-Looking Statements..........
Where You Can Find More Information ...............................
Incorporation by Reference.........................................
Southern Union Company.............................................
Use of Proceeds....................................................
Ratio of Earnings to Fixed Charges ................................
Unaudited Pro Forma Combined Condensed Financial Statements........
Description of the Debt Securities.................................
Plan of Distribution...............................................
Legal Matters......................................................
Experts............................................................



                                        1

<PAGE>



                              ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement that we have filed with the
Securities and Exchange Commission (SEC) utilizing a "shelf" registration
process. Under this shelf process, we may, over the next two years, sell dif
ferent types of securities described in this prospectus in one or more offerings
up to a total offering amount of $400,000,000. This prospectus provides you with
a general description of the securities we may offer. Each time we sell
securities, we will provide a prospectus supplement that will contain specific
information about the terms of that offering and the securities offered by us in
that offering. The prospectus supplement may also add, update or change
information in this prospectus. You should read both this prospectus and any
prospectus supplement together with additional information described under the
heading "Where You Can Find More Information."

            CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

We have made statements in this prospectus, the accompanying prospectus
supplement and in documents that are incorporated by reference into this
document that constitute forward-looking statements. These statements are
subject to risks and uncertainties. Forward-looking statements include
information concerning possible or assumed future results of our operations.
These statements may relate to, but are not limited to, information or
assumptions about earnings per share, capital and other expenditures, dividends,
financing plans, capital structure, cash flow, pending legal proceedings and
claims, including environmental matters, future economic performance, operating
income, cost savings, management's plans, goals and objectives for future
operations and growth and markets for our common stock. These forward-looking
statements generally are accompanied by words such as "intend," "anticipate,"
"believe," "estimate," "expect," "should" or similar expressions. You should
understand that these forward-looking statements are necessary estimates
reflecting the best judgment of our senior management, not guarantees of future
performance. They are subject to a number of assumptions, risks and
uncertainties that could cause actual results to differ materially from those
expressed or implied in the forward-looking statements.

Important factors that could cause actual results to differ materially from
estimates or projections contained in forward-looking statements include, among
others, the following:

     - general economic, financial and business conditions;
     - competition in the energy services sector;
     - the availability of natural gas and oil;
     - development and operating costs;
     - the availability and terms of capital;
     - unanticipated environmental liabilities;
     - the impacts of unusual items resulting from ongoing evaluations of
       business strategies and asset valuations;
     - changes in business strategy;
     - the application of newly adopted Generally Accepted Accounting
       Principles;
     - the timing and extent of changes in commodity prices;
     - gas sales volumes;
     - weather conditions and other natural phenomena in our service
       territories;
     - the purchase and implementation of new technologies for enhancing
       customer service and/or operating 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 the companies,
       including the restructuring of the natural gas industry in
       Massachusetts, Rhode Island, Pennsylvania, Texas, Missouri and Florida;
     - the nature and impact of any extraordinary transactions such as any
       acquisition or divestiture of a business unit or any assets; and
     - the risk that the businesses of Pennsylvania Enterprises, Inc. (PEI),
       Fall River Gas Company (Fall River Gas), Providence Energy Corporation
       (ProvEnergy), Valley Resources, Inc. (Valley Resources) 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.



                                        2

<PAGE>



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 have been incorporated by reference into this document.
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. The rules and regulations of the SEC allow us to omit some
information included in the registration statement from this prospectus.

In addition, we file annual, quarterly and special reports, proxy statements and
other information with the SEC under the Securities Exchange Act of 1934
("Exchange Act"). You may read and copy this information 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 Company, 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 us 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 information that is included directly in
this document.

We incorporate by reference the documents listed below that we have previously
filed with the SEC. They contain important information about us and our
financial condition.

Southern Union's Financial Statements:

     SEC FILINGS (FILE NO. 1-6407)              DESCRIPTION OR PERIOD/AS OF DATE

     Annual Report on Form 10-K                 Year ended June 30, 2001
     Definitive Proxy Statement on
          Schedule 14A                          Definitive Proxy Statement
                                                    relating to the 2001 Annual
                                                    Meeting of Stockholders
                                                    (filed on October 1, 2001)

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(a) of the Securities
Exchange Act of 1934 between the date of filing this initial Registration
Statement of which this Prospectus forms a part until the date all of the
securities offered by this prospectus have been sold. 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.


                                        3

<PAGE>



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 exhibit is specifically
incorporated by reference as an exhibit in this 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
                             Southern Union Company
                                 One PEI Center
                        Wilkes-Barre, Pennsylvania 18711
                          Telephone No.: (570) 829-8600

We have not authorized anyone to give any information or make any representation
that differs from, or adds to, the information in this document or in our
documents that are publicly filed with the SEC. Therefore, if anyone does give
you different or additional information, you should not rely on it.

If you are in a jurisdiction where it is unlawful to offer to exchange or sell,
or to ask for offers to exchange or buy, the securities offered by this
document, or if you are a person to whom it is unlawful to direct these
activities, then the offer presented by this document does not extend to you.

The information contained in this document speaks only as of its date unless the
information specifically indicates that another date applies.



                                        4

<PAGE>



                             SOUTHERN UNION COMPANY


Our principal line of business is the distribution of natural gas as a public
utility through our operating divisions principally in Texas, Missouri, Florida,
Pennsylvania, Rhode Island and Massachusetts.

We distribute natural gas through our divisions Southern Union Gas, Missouri Gas
Energy, PG Energy, South Florida Natural Gas (SFNG) and our New England
Division. The diverse geographic area of the Company's natural gas distribution
systems should reduce the overall sensitivity of Southern Union's operations to
weather risk and local economic conditions.

o    Southern Union Gas, headquartered in Austin, Texas, serves approximately
     535,000 customers in Texas (including Austin, Brownsville, El Paso,
     Galveston, Harlingen, McAllen and Port Arthur);
o    Missouri Gas Energy, headquartered in Kansas City, Missouri, serves
     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, serves
     approximately 156,000 customers in northeastern and central Pennsylvania
     (including Wilkes-Barre, Scranton and Williamsport);
o    The New England Division (created through the acquisition of ProvEnergy,
     Valley Resources and Fall River Gas in September 2000) serves approximately
     292,000 customers in Rhode Island and Massachusetts (including Providence,
     Newport and Cumberland, Rhode Island and Fall River, North Attleboro and
     Somerset, Massachusetts.)
o    SFNG, headquartered in New Smyrna Beach, Florida, serves approximately
     4,600 customers in central Florida (including New Smyrna Beach, Edgewater
     and areas of Volusia County, Florida);

We have created subsidiaries to support and expand our natural gas and other
energy sales and to capitalize on our energy expertise. Our subsidiaries market
natural gas to end-users, operate natural gas pipeline systems, generate
electricity, distribute propane, and sell commercial gas air conditioning and
other gas-fired engine-driven applications. Central to all of our present
businesses and strategies are the sale and transportation of natural gas.

We are a sales and market-driven energy company whose management is committed to
achieving profitable growth of our utility divisions in an increasingly
competitive business environment and partnering with companies which complement
Southern Union's existing customer service and core utility business. Our
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 selective acquisition of new utility businesses; and
o    selective investments in complementary businesses.

Our 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 our existing
businesses, reflects our commitment to our core gas utility business.

Our corporate headquarters are located at 504 Lavaca Street, Suite 800, Austin,
Texas 78701, and our telephone number is (512) 477-5852.

                                 USE OF PROCEEDS

We intend to add the net proceeds from the sale of the debt securities offered
by this prospectus to our general funds to be used for general corporate
purposes, including:

     - repayment of other borrowings, including short-term borrowings, under
       bank credit agreements;
     - repurchases of outstanding long-term debt securities; or
     - as otherwise disclosed in any supplement to this prospectus.


                                        5

<PAGE>



We may invest any funds we do not require immediately in marketable securities
and short-term investments.

                       RATIO OF EARNINGS TO FIXED CHARGES

The following table sets forth the ratio of earnings to fixed charges for us on
an historical basis for each of the five years in the period ended June 30, 2001
and on a pro forma basis for the year ended June 30, 2001. For the purpose of
calculating such ratios, "earnings" consist of income from continuing operations
before income taxes and "fixed charges" consist of interest expense,
amortization of debt discount or premium and an estimate of interest implicit in
rentals.

                                                         Year Ended June 30,
                                                    ----------------------------
                                                    2001  2000  1999  1998  1997
                                                    ----  ----  ----  ----  ----

Ratio of Earnings to Fixed Charges.............     1.80  1.29  1.36  1.42  1.67
                                                    ====  ====  ====  ====  ====

Pro Forma - Ratio of Earnings to Fixed
   Charges(a)..................................     1.52
                                                    ====

---------------------------

(a)      This pro forma ratio gives effect as of the beginning of the period
         presented to: the application of the estimated net proceeds of this
         offering; and the acquisition of ProvEnergy, Valley Resources and Fall
         River Gas, which were primarily financed through a Term Note. The
         acquisitions of ProvEnergy, Valley Resources and Fall River Gas were
         assumed to occur as of the beginning of the period presented, as
         reflected in the Unaudited Pro Forma Combined Condensed Financial
         Statements.




                                        6

<PAGE>



           UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS


The following Unaudited Pro Forma Combined Condensed Financial Statements
present the combined financial data of Southern Union, Valley Resources, Fall
River Gas, and ProvEnergy, including their respective subsidiaries, after giving
effect to Southern Union's merger with each of them. The Valley Resources merger
completed on September 20, 2000 and the Fall River Gas and ProvEnergy mergers
completed September 28, 2000 were each accounted for as a purchase. The
Unaudited Pro Forma Combined Condensed Financial Statements also give effect to
Southern Union's issuance of Term Note financing for our acquisitions of Valley
Resources, Fall River Gas, and ProvEnergy, and the assumption of certain debt of
the acquired companies.

The Unaudited Pro Forma Combined Condensed Statement of Operations for the year
ended June 30, 2001 give effect to the previously identified acquisitions and
financing transaction as if they had occurred at the beginning date for the
period presented.

The fiscal year of Southern Union ends on June 30. The fiscal years of Fall
River Gas and ProvEnergy ended on September 30. The fiscal year of Valley
Resources ended on August 31. Accordingly, the Unaudited Pro Forma Combined
Condensed Statement of Operations for the year ended June 30, 2001 has been
prepared using comparable financial statement periods of Valley Resources, Fall
River Gas and ProvEnergy. The following Unaudited Pro Forma Combined Condensed
Financial Statements have been prepared from, and should be read in conjunction
with, those historical financial statements and related notes thereto of
Southern Union, Fall River Gas, ProvEnergy and Valley Resources.

The historical financial statements of the acquired companies that appear in or
were used for the Unaudited Pro Forma Combined Condensed Financial Statements
include or required certain reclassifications to conform to Southern Union's
presentation. These reclassifications have no impact on net income or total
stockholders' equity.

The following Unaudited Pro Forma Combined Condensed Financial Statements are
presented in accordance with the assumptions set forth below for purposes of
illustration only and are not necessarily indicative of the financial position
or operating results that would have occurred if the previously identified
acquisitions and financing transactions had been consummated at the beginning of
the periods for which they are being given effect nor are they necessarily
indicative of the future operating results or financial position of the combined
enterprise. The Unaudited Pro Forma Combined Condensed Financial Statements do
not contain any adjustments to reflect cost savings or other synergies that may
occur as a result of the mergers.




                                        7

<PAGE>



         UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
                    For The Twelve Months Ended June 30, 2001





                                 Historical
                --------------------------------------
                             Provi-
                             dence     Fall    Valley
                 Southern    Energy    River    Re-            Pro Forma
                  Union      Corpo-     Gas    sources  ------------------------
                 Company     ration   Company    Inc.   Adjustments   Combined
                ----------   -------  -------  -------  -----------  -----------
                  (thousands of dollars, except shares and per share amounts)

Operating
 revenues....    $1,932,813  $ 31,669  $ 3,945  $ 8,046  $   --      $1,976,473
Cost of gas
 and other
 energy......     1,374,750    18,765    1,565    4,139      --       1,399,219
                 ----------  --------  -------  -------  --------    ----------
  Operating
   margin....       558,063    12,904    2,380    3,907      --         577,254

Operating
 expenses:
  Operating,
   mainte-
   nance and
   general...       239,554    15,150    3,133    3,922      --         261,759
  Deprecia-
   tion and
   amortiza-
   tion......        86,985     6,118      163      177    2,252 (A)     95,695
  Taxes,
   other
   than on
   income....        98,661     2,921       93      799      --         102,474
                 ----------  --------  -------  -------  -------     ----------
    Total
     opera-
     ting ex-
     penses..       425,200    24,189    3,389    4,898    2,252        459,928
                 ----------  --------  -------  -------  -------     ----------
    Net
     opera-
     ting
     reve-
     nues....       132,863   (11,285)  (1,009)    (991)  (2,252)       117,326

Other income
 (expenses):
  Interest...      (103,519)   (2,929)    (368)  (1,975) (10,141)(B)   (117,019)
                                                           1,913 (C)
  Dividends
   on pre-
   ferred
   securi-
   ties......        (9,480)     --       --       --       --           (9,480)
  Other, net.        76,819     1,126      225      309     --           78,479
                 ----------  --------  -------  -------  -------     ----------
   Total
    other
    expenses,
    net......       (36,180)   (1,803)    (143)  (1,666)  (8,228)       (48,020)
                 ----------  --------  -------  -------  -------     ----------
Earnings
 (loss) be-
 fore income
 taxes (bene-
 fit)........        96,683   (13,088)  (1,152)  (2,657) (10,480)        69,306
Federal and
 state income
 taxes (bene-
 fit)........        40,000    (1,609)    (478)    (876)  (2,880)(D)     34,157
                 ----------  --------  -------  -------  -------     ----------
Net earnings
 (loss)
 available
 for common
 stock.......    $   56,683  $(11,479) $  (674) $(1,781) $(7,600)    $   35,149
                 ==========  ========  =======  =======  =======     ==========

Net earnings
 per share:
  Basic......    $     1.09                                          $     0.67
                 ==========                                          ==========
  Diluted....    $     1.03                                          $     0.64
                 ==========                                          ==========

Weighted
 average
 shares out-
 standing:
  Basic......    52,068,814                              330,453 (E) 52,399,267
                 ==========                              =======     ==========
  Diluted....    54,960,595                              330,453 (E) 55,291,048
                 ==========                              =======     ==========



















             See accompanying notes to Unaudited Pro Forma Combined
                        Condensed Financial Statements.


                                        8

<PAGE>



      NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS



Adjustments to the Unaudited Pro Forma Combined Condensed Statements of
Operations

(A)   Reflects amortization of the estimated excess purchase price over the
      historical cost of the regulated net assets and the estimated fair value
      of the non-regulated net assets of Fall River Gas, ProvEnergy, and Valley
      Resources on a straight-line basis over a 40-year period.  For the twelve
      months ended June 30, 2001, the pro forma adjustment reflects only three
      months of amortization of additional purchase cost related to the
      acquisitions of Fall River Gas, ProvEnergy and Valley Resources, as nine
      months of actual are included in Southern Union's historical balances due
      to the completion of the Valley Resources acquisition on September 20,
      2000 and the Fall River Gas and ProvEnergy acquisitions on September 28,
      2000 (together the New England acquisitions).

(B)   Reflects interest expense on the Term Note financing for the New England
      acquisitions at an annual interest rate of 7.50%. The Term Note was
      utilized: to finance the cash portion of the purchase of Fall River Gas,
      ProvEnergy and Valley Resources and the settlement of any respective stock
      options; to refinance certain debt of Valley Resources and Southern Union;
      and to pay various professional fees and change of control agreements
      incurred in connection with all mergers.

(C)   Reflects the elimination of historical interest expense of Valley
      Resources as a result of refinancing certain debt in connection with such
      mergers. See Note (B).

(D)   Reflects the income tax consequences at the federal statutory rate of the
      pro forma adjustments after excluding nondeductible goodwill amortization.

(E)   The twelve months ended June 30, 2001 reflect the timing of the issuance
      of 1,370,629 shares of Southern Union stock in the purchase of Fall River
      Gas.




                                        9

<PAGE>



                       DESCRIPTION OF THE DEBT SECURITIES


General

This is a description of the general terms and provisions of the debt
securities. The particular terms of the debt securities will be described in a
prospectus supplement relating to those securities.

The debt securities may be issued in one or more series and will be senior debt
securities issued under a senior debt securities indenture between us and The
Chase Manhattan Bank, as the senior debt securities trustee.

We have summarized selected provisions of the debt securities and the indenture
below. These descriptions only summarize material provisions of the indenture.
We have not restated the entire agreement. We urge you to read the indenture
because the indenture itself, and not this description, defines your rights as a
holder of our debt securities. Copies of the indenture are filed as an exhibit
to the Registration Statement that includes this prospectus.

The debt securities will be our direct, unsecured obligations. The senior debt
securities will rank equally with all of our other senior and unsubordinated
debt. The general summary that follows applies to our senior debt securities.

The indenture provides that the debt securities may be issued from time to time
in one or more series. A prospectus supplement and a supplemental indenture
relating to any series of debt securities being offered will include specific
terms relating to the offered debt securities. These terms will include some or
all of the following:

      -  the title and type of the debt securities;
      -  the total principal amount of the debt securities and the currency, if
         other than U. S. dollars, in which such notes are denominated;
      -  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;
      -  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;
      -  the interest rate which the debt securities will bear and the interest
         payment dates for the debt securities; - any optional redemption
         periods;
      -  any sinking fund or other provisions that would obligate us to
         repurchase or otherwise redeem some or all of the debt securities;
      -  any changes to or additional events of default or covenants;
      -  any special tax implications of the debt securities, including
         provisions for original issue discount securities, if offered;
      -  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
      -  any other terms of the debt securities.

The indenture does not limit the aggregate principal amount of debt securities
that we may issue pursuant to such indenture. The indenture does not contain any
provisions that would limit our ability to incur debt. The indenture does not
contain any provisions that protect the holders of the debt securities in the
event that we engage 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 debt securities. If a particular series of the debt
securities has a provision providing protection to the holders of the debt
securities in the event of a highly leveraged or other transaction in the event
of a takeover attempt, it will be described in the prospectus supplement
relating to that series of debt securities.

Under the indenture, we have the ability to issue debt securities with terms
different from those of debt securities already issued, without the consent of
the holders of any previously issued series of debt securities.

Debt securities of a series may be issued in registered, bearer, coupon or
global form.



                                       10

<PAGE>



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.

Ranking of Senior Debt Securities

The senior debt securities will rank equally with all of our other unsecured
indebtedness, 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 secured by mortgages on assets in our PG Energy and New England
divisions. As a result, those securities have priority with respect to those
mortgage assets.

Covenants

Under the indenture, we will:

      - pay the principal of, and interest and any premium on, the debt
        securities when due; - maintain a place of payment; - deliver a report
        to the trustee at the end of each fiscal year reviewing our obligations
        under the indenture; and
      - 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:

      -  either we are the continuing corporation or such corporation or entity
         assumes by supplemental indenture all of our obligations under the
         indenture and the debt securities;
      -  no default or event of default is existing immediately after the
         transaction; and
      -  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

      -  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

      -  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.




                                       11

<PAGE>



These restrictions do not prohibit us from creating the following:

     (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, construc tion, 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 "Certain Definitions" 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 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 indenture also provides 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;


                                       12

<PAGE>



     (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 repay ment, redemption or retirement of our funded debt or funded
         debt of any such subsidiary; or

     (3) the Attributable Debt (as defined below under "Certain Definitions")
         from such sale-leaseback 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 "Certain Definitions" below).

Events of Default

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

     -   failure to pay any interest or any additional amounts due on any debt
         security, or of any coupon, for 30 days;
     -   failure to pay the principal of or any premium on any debt security
         when due, whether at maturity, upon redemption, by declaration or
         otherwise;
     -   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;
     -   cross-acceleration of our other debt in excess of 10% of our
         consolidated net worth;
     -   events in any bankruptcy, insolvency or reorganization of our
         company;
     -   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
auto matically 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:

     -   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


                                       13

<PAGE>



         all matured installments of interest and principal due otherwise than
         by acceleration and any applicable premium has been deposited with the
         trustee; or

     -   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 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
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:

     -   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;
     -   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;
     -   change our obligation to pay additional amounts in respect of any debt
         security of such series;
     -   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;
     -   adversely affect any right of repayment at the option of the holder of
         any debt security of such series;
     -   change the place or currency of payment of principal of, or any premium
         or interest on, any debt security of such series;
     -   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;
     -   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;
     -   modify the change of control provisions, if any;
     -   reduce the percentage of outstanding debt securities of such series
         necessary to waive any past default; or
     -   modify any of the above requirements.

We and the trustee may modify and amend the indenture without the consent of any
holder for the following purposes:

     -   to evidence the succession of another entity to us as obligor under an
         indenture;
     -   to add to our covenants for the benefit of the holders of all or any
         series of debt securities;
     -   to add events of default for the benefit of the holders of all or any
         series of debt securities;
     -   to add or change any provisions of the indenture to facilitate the
         issuance of bearer securities;
     -   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 debt securities of any series created prior to the change
         or elimination that is entitled to the benefit of such provision;
     -   to establish the form or terms of debt securities of any series and any
         related coupons;
     -   secure the debt securities;
     -   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
     -   to change the indenture with respect to the authentication and delivery
         of additional series of 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 debt
         securities of any series in any material respect.

The indenture contains 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 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 debt securities of that series, except for any consent
that must be given by the holder of each debt security affected, as


                                       14

<PAGE>



described above in this section. Any resolution passed or decision made in
accordance with the indenture 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 indenture expressly provides
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:

     -   there will be no minimum quorum requirement for such meeting; and
     -   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 indenture.

Defeasance

We will be discharged from our obligations on the senior 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 Indenture

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:



                                       15

<PAGE>



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:

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
govern mental 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:

     -   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.
     -   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;
     -   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


                                       16

<PAGE>



     -   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.

Global Securities

We may issue one or more series of the debt securities as permanent global debt
securities deposited with a depositary. Unless otherwise indicated in the
prospectus supplement, the following is a summary of the depository arrangements
applicable to debt securities issued in permanent global form and for which The
Depositary Trust Company (DTC) acts as depositary.

Each global debt security will be deposited with, or on behalf of, DTC, as
depositary, or its nominee and registered in the name of a nominee of DTC.
Except under the limited circumstances described below, global debt securities
are not exchangeable for definitive certificated debt securities.

Ownership of beneficial interests in a global debt security is limited to
participants that have accounts with DTC or its nominee, or persons that may
hold interests through those participants. In addition, ownership of beneficial
interests by participants in a global debt security will be evidenced only by,
and the transfer of that ownership interest will be effected only through,
records maintained by DTC or its nominee for a global debt security. Owner ship
of beneficial interests in a global debt security by persons that hold through
participants will be evidenced only by, and the transfer of that ownership
interest within that participant will be effected only through, records main
tained by that participant. DTC has no knowledge of the actual beneficial owners
of the debt securities. Beneficial owners will not receive written confirmation
from DTC of their purchase, but beneficial owners are expected to receive
written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the participants through which the beneficial
owners entered the transaction. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such laws may impair the ability to transfer beneficial
interests in a global debt security.

We will make payment of principal of, and interest on, debt securities
represented by a global debt security registered in the name of or held by DTC
or its nominee to DTC or its nominee, as the case may be, as the registered
owner and holder of the global debt security representing those debt securities.
DTC has advised us that upon receipt of any payment of principal of, or interest
on, a global debt security, DTC will immediately credit accounts of participants
on its book-entry registration and transfer system with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of that global debt security as shown in the records of DTC. Payments by
participants to owners of beneficial interests in a global debt security held
through those participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the sole
responsibility of those participants, subject to any statutory or regulatory
requirements that may be in effect from time to time.

Neither we, the trustee, nor any of our respective agents, will be responsible
for any aspect of the records of DTC, any nominee or any participant relating
to, or payments made on account of, beneficial interests in a permanent global
debt security or for maintaining, supervising or reviewing any of the records of
DTC, any nominee or any participant relating to such beneficial interests.

A global debt security is exchangeable for definitive debt securities registered
in the name of, and a transfer of a global debt security may be registered to,
any person other than DTC or its nominee, only if:

     -   DTC notifies us that it is unwilling or unable to continue as
         depositary for that global debt security or at any time DTC ceases to
         be registered under the Exchange Act;
     -   we determine in our discretion that the global debt security shall be
         exchangeable for definitive debt securities in registered form; or
     -   there shall have occurred and be continuing an event of default or an
         event which, with notice or the lapse of time or both, would constitute
         an event of default under the debt securities.

Any global debt security that is exchangeable pursuant to the preceding sentence
will be exchangeable in whole for definitive debt securities in registered form,
of like tenor and of an equal aggregate principal amount as the global debt
security, in denominations specified in the applicable prospectus supplement, if
other than $1,000 and integral


                                       17

<PAGE>



multiples of $1,000. The definitive debt securities will be registered by the
registrar in the name or names instructed by DTC. We expect that these
instructions may be based upon directions received by DTC from its participants
with respect to ownership of beneficial interests in the global debt security.

Except as provided above, owners of the beneficial interests in a global debt
security will not be entitled to receive physical delivery of debt securities in
definitive form and will not be considered the holders of debt securities for
any purpose under the indenture. No global debt security shall be exchangeable
except for another global debt security of like denomination and tenor to be
registered in the name of DTC or its nominee. Accordingly, each person owning a
beneficial interest in a global debt security must rely on the procedures of DTC
and, if that person is not a participant, on the procedures of the participant
through which that person owns its interest, to exercise any rights of a holder
under the global debt security or the indenture.

We understand that, under existing industry practices, in the event that we
request any action of holders, or an owner of a beneficial interest in a global
debt security desires to give or take any action that a holder is entitled to
give or take under the debt securities or the indenture, DTC would authorize the
participants holding the relevant beneficial interests to give or take that
action, and those participants would authorize beneficial owners owning through
those participants to give or take that action or would otherwise act upon the
instructions of beneficial owners owning through them.

DTC has advised us that DTC is a limited purpose trust company organized under
the laws of the State of New York, a "banking organization" within the meaning
of the New York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered under the Exchange Act. DTC was created to hold
securities of its participants and to facilitate the clearance and settlement of
securities transactions among its participants in those securities through
electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. DTC's
participants include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations. DTC is owned by a number
of its participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc. Access
to DTC's book-entry system is also available to others, such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly. The rules
applicable to DTC and its participants are on file with the SEC.

Governing Law

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




                                       18

<PAGE>



                              PLAN OF DISTRIBUTION



We may sell any series of the debt securities to or through underwriters or
dealers, directly to purchasers, or through agents. The prospectus supplement
with respect to any offering of securities will set forth:

     -   the terms of the offering of the securities, including the name or
         names of any underwriters, dealers or agents;
     -   the purchase price of the securities and the proceeds to us;
     -   any underwriting discounts and commissions or agency fees and other
         items constituting underwriters' or agents' compensation;
     -   any initial public offering prices;
     -   any discounts or concessions allowed or reallowed or paid to dealers;
         and
     -   any securities exchange on which the offered securities may be listed.

Any initial public offering price, discounts or concessions allowed or reallowed
or paid to dealers may be changed from time to time.

We may designate agents to solicit offers to purchase our securities.

     -   We will name any agent involved in offering or selling our securities,
         and any commissions that we will pay to the agent, in our prospectus
         supplement.
     -   Unless we indicate otherwise in our prospectus supplement, our agents
         will act on a best efforts basis for the period of their appointment.
     -   Our agents may be deemed to be underwriters under the Securities Act of
         1933 of any of our securities that they offer or sell.

We may use one or more underwriters in the offer or sale of our securities.

     -   If we use an underwriter, we will execute an underwriting agreement
         with the underwriter(s) at the time that we reach an agreement for the
         sale of our securities.
     -   We will include the names of the managing underwriter(s), as well as
         any other underwriters, and the terms of the transaction, including the
         compensation the underwriters and dealers will receive, in our
         prospectus supplement.
     -   The underwriters will use our prospectus supplement to sell our
         securities.

We may use a dealer to sell our securities.

     -   If we use a dealer, we, as principal, will sell our securities to the
         dealer.
     -   The dealer will then sell our securities to the public at varying
         prices that the dealer will determine at the time it sells our
         securities.
     -   We will include the name of the dealer and the terms of our
         transactions with the dealer in our prospectus supplement.

We may directly solicit offers to purchase our securities, and we may directly
sell our securities to institutional or other investors. We will describe the
terms of our direct sales in our prospectus supplement.

We may indemnify agents, underwriters, and dealers against certain liabilities,
including liabilities under the Securities Act of 1933, or as to contribution
with respect to payments that such agents, dealers or underwriters may be
required to make in connection with those liabilities. Our agents, underwriters,
and dealers, or their affiliates, may be customers of, engage in transactions
with or perform services for us, in the ordinary course of business.

We may authorize our agents and underwriters to solicit offers by certain
institutions to purchase our securities at the public offering price under
delayed delivery contracts.



                                       19

<PAGE>



     -   If we use delayed delivery contracts, we will disclose that we are
         using them in the prospectus supplement and will tell you when we will
         demand payment and delivery of the securities under the delayed
         delivery contracts.
     -   These delayed delivery contracts will be subject only to the conditions
         that we set forth in the prospectus supplement.
     -   We will indicate in our prospectus supplement the commission that
         underwriters and agents soliciting purchases of our securities under
         delayed delivery contracts will be entitled to receive.

Each series of debt securities offered will be a new issue of securities and
will have no established trading market. Any underwriters to whom the securities
are sold for public offering and sale may make a market in the securities, but
will not be obligated to do so and may discontinue any market making at any time
without notice. The securities offered may or may not be listed on a national
securities exchange. No assurance can be given that there will be a market for
the securities.

                                  LEGAL MATTERS

The validity of the securities offered hereby 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., is a director of Southern Union.
Mr. Fleischman, 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 two percent (2%) of the shares of our common stock outstanding.

                                     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, 2001,
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.





                                       20

<PAGE>



No dealer, salesperson or other individual has been autho rized to give any
information or to make any representa tions other than those contained or
incorporated by reference in this prospectus and, if given or made, such
information or representation must not be relied upon as having been authorized
by Southern Union Company, or the Underwriters. Neither the delivery of this
prospectus nor any sale made hereunder and thereunder shall under any
circumstance create an implication that there has been no change in the affairs
of Southern Union Company, since the date of this prospectus. This prospectus
does not constitute an offer or solicitation by anyone in any state in which
such offer or solicitation is not authorized or in which the person making such
offer or solicitation is not qualified to do so or to anyone to whom it is
unlawful to make such offer or solicitation.

                                TABLE OF CONTENTS

                                                                          Page
                                                                         Number

About this Prospectus..............................................
Cautionary Statement Regarding Forward-Looking Statements..........
Where You Can Find More Information ...............................
Incorporation by Reference.........................................
Southern Union Company.............................................
Use of Proceeds....................................................
Ratio of Earnings to Fixed Charges ................................
Unaudited Pro Forma Combined Condensed Financial Statements........
Description of the Debt Securities.................................
Plan of Distribution...............................................
Legal Matters......................................................
Experts............................................................





















-----------------------------------------------













                             Senior Debt Securities






                             Southern Union Company






                                   PROSPECTUS






                                __________, 2001






















--------------------------------------


                                       21

<PAGE>



                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14.  Other Expenses of Issuance and Distribution.*

     Securities and Exchange Commission Filing Fee.................    $100,000
     Rating Agency Fees............................................     100,000
     Blue Sky Fees and Expenses....................................      15,000
     Trustee's Expenses............................................       5,000
     Printing and Engraving Fees...................................      35,000
     Accounting Fees and Expenses..................................      45,000
     Legal Fees and Expenses.......................................     175,000
     Miscellaneous.................................................      25,000
                                                                       --------

         Total.....................................................    $500,000
                                                                       ========

---------------------------------

* All fees and expenses other than SEC Registration Fee 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. The
Company's Bylaws require the Company to indemnify their 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 the 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
indemnification for any acts taken in their capacity as a director of Southern
Union to the fullest extent permitted under Delaware law.

Any agents, dealers or underwriters who execute any of the agreements filed as
Exhibit 1 to this registration state ment will agree to indemnify Southern
Union's directors and their officers who signed the registration statement



<PAGE>



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 in parentheses below 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.

(1)    Underwriting Agreement
1.1    - Form of Underwriting Agreement for offering debt securities. To be
       filed by amendment or subsequent Exchange Act Report by the Registrant.

(4)    Instruments Defining the Rights of Security Holders, Including Indentures
4.1    - Indenture between Chase Manhattan Bank, N.A. (as successor to, Chase
       Manhattan Bank), as trustee, and Southern Union Company dated January 31,
       1994, for Senior Debt Securities. (Filed as Exhibit 4.1 to Southern
       Union's Current Report on Form 8-K dated February 15, 1994 and
       incorporated herein by reference.)
4.2    - Form of Subordinated Debt Securities Indenture among Southern Union
       Company and Chase Manhattan Bank, N.A. (as successor to, Chase Manhattan
       Bank), 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    - First Mortgage Bonds Debenture of Mortgage and Deed of Trust dated as
       of March 15, 1946 by Southern Union Company (as successor to PG Energy,
       Inc. formerly, Pennsylvania Gas and Water Company, and originally,
       Scranton-Spring Brook Water Service Company) to Guaranty Trust Company of
       New York. (Filed as Exhibit 4.1 to Southern Union's Current Report on
       Form 8-K filed on December 30, 1999 and incorporated herein by
       reference.)
4.4    - Twenty-Third Supplemental Indenture dated as of August 15, 1989
       (Supplemental to Indenture dated as of March 15, 1946) between Southern
       Union Company (as successor to PG Energy, Inc. formerly Pennsylvania Gas
       and Water Company, and originally Scranton-Spring Brook Water Service
       Company) and Morgan Guaranty Trust Company of New York (formerly Guaranty
       Trust Company of New York). (Filed as Exhibit 4.2 to Southern Union's
       Current Report on Form 8-K filed on December 30, 1999 and incorporated
       herein by reference.)
4.5    - Twenty-Sixth Supplemental Indenture dated as of December 1, 1992
       (Supplemental to Indenture dated as of March 15, 1946) between Southern
       Union Company (as successor to PG Energy, Inc. formerly Pennsylvania Gas
       and Water Company, and originally Scranton-Spring Brook Water Service
       Company) and Morgan Guaranty Trust Company of New York. (Filed as Exhibit
       4.3 to Southern Union's Current Report on Form 8-K filed on December 30,
       1999 and incorporated herein by reference.)
4.6    - Thirtieth Supplemental Indenture dated as of December 1, 1995
       (Supplemental to Indenture dated as of March 15, 1946) between Southern
       Union Company (as successor to PG Energy, Inc. formerly Pennsylvania Gas
       and Water Company, and originally Scranton-Spring Brook Water Service
       Company) and First Trust of New York, National Association (as successor
       trustee to Morgan Guaranty Trust Company of New York). (Filed as Exhibit
       4.4 to Southern Union's Current Report on Form 8-K filed on December 30,
       1999 and incorporated herein by reference.)
4.7    - Thirty-First Supplemental Indenture dated as of March 15, 1946) between
       Southern Union Company (successor to PG Energy, Inc., formerly
       Pennsylvania Gas and Water Company) and U. S. Bank Trust, National
       Association (formerly, First Trust of New York, National Association).
       (Filed as Exhibit 4.5 to Southern Union's Current Report on Form 8-K
       filed on December 30, 1999 and incorporated herein by reference.)
4.8    - Pennsylvania Gas and Water Company Bond Purchase Agreement dated
       September 1, 1989. (Filed as Exhibit 4.6 to Southern Union's Current
       Report on Form 8-K filed on December 30, 1999 and incorporated herein by
       reference.)
4.9    - Southern Union is a party to other debt instruments, none of which
       authorizes the issuance of debt securities in an amount which exceeds 10%
       of the total assets of Southern Union. Southern Union hereby agrees to
       furnish a copy of any of these instruments to the Commission upon
       request.

(5)    Opinion re Legality
5.1    - Opinion of Fleischman and Walsh, L.L.P. including the consent of such
       firm.



<PAGE>



(12)   Statements re Computation of Ratios
12-1   - Computation of Ratio of Earnings to Fixed Charges of Southern Union
       Company.
12-2   - Computation of Pro Forma Ratio of Earnings to Fixed Charges of Southern
       Union Company

(23)   Consents of Experts and Counsel
23-A   - Consent of Independent Accountants, PricewaterhouseCoopers LLP.
23-B   - Consent of Fleischman and Walsh, L.L.P. is contained in the opinion of
       counsel filed as Exhibit 5.1

(24)   Powers of Attorney
24     - Power of Attorney of the Directors of the Registrant.

(25)   Statements of Eligibility of Trustees
25.1   - Statement of Eligibility under the Trust Indenture Act of 1939, as
       amended, of The Chase Manhattan Bank, as Trustee, under the Senior Debt
       Securities Indenture.

Item 17.  Undertaking.

The Registrant hereby undertakes 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, as
amended (the "Exchange Act") (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.

The Registrant hereby undertakes:

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

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

    o    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.

     o   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.




<PAGE>



(2)  That, for the purpose of determining any liability under the Securities
     Act, each such post-effective amend ment 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.

The Registrant 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.




<PAGE>




                                   SIGNATURES



Pursuant to the requirements of the Securities Act of 1933, the Registrant
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 Austin, State of Texas, on October 19, 2001.


                                 SOUTHERN UNION COMPANY


                                 By   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 October 19, 2001.

   Signature/Name                                     Title

GEORGE L. LINDEMANN*          Chairman of the Board, Chief Executive Officer and
                              Director

THOMAS F. KARAM*              Director and Chief Operating Officer

JOHN E. BRENNAN*              Director

FRANK W. DENIUS*              Director

AARON I. FLEISCHMAN*          Director

KURT A. GITTER, M.D.*         Director

ADAM M. LINDEMANN*            Director

ROGER J. PEARSON*             Director

GEORGE ROUNTREE, III*         Director

RONALD W. SIMMS*              Director

DAN K. WASSONG*               Director

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

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



<PAGE>



                                  EXHIBIT INDEX



(1)    Underwriting Agreement
1.1    - Form of Underwriting Agreement for offering debt securities. To be
       filed by amendment or subsequent Exchange Act Report by the Registrant.

(4)    Instruments Defining the Rights of Security Holders, Including Indentures
4.1    - Indenture between Chase Manhattan Bank, N.A. (as successor to, Chase
       Manhattan Bank), as trustee, and Southern Union Company dated January 31,
       1994, for Senior Debt Securities. (Filed as Exhibit 4.1 to Southern
       Union's Current Report on Form 8-K dated February 15, 1994 and
       incorporated herein by reference.)
4.2    - Form of Subordinated Debt Securities Indenture among Southern Union
       Company and Chase Manhattan Bank, N.A. (as successor to, Chase Manhattan
       Bank), 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    - First Mortgage Bonds Debenture of Mortgage and Deed of Trust dated as
       of March 15, 1946 by Southern Union Company (as successor to PG Energy,
       Inc. formerly, Pennsylvania Gas and Water Company, and originally,
       Scranton-Spring Brook Water Service Company) to Guaranty Trust Company of
       New York. (Filed as Exhibit 4.1 to Southern Union's Current Report on
       Form 8-K filed on December 30, 1999 and incorporated herein by
       reference.)
4.4    - Twenty-Third Supplemental Indenture dated as of August 15, 1989
       (Supplemental to Indenture dated as of March 15, 1946) between Southern
       Union Company (as successor to PG Energy, Inc. formerly Pennsylvania Gas
       and Water Company, and originally Scranton-Spring Brook Water Service
       Company) and Morgan Guaranty Trust Company of New York (formerly Guaranty
       Trust Company of New York). (Filed as Exhibit 4.2 to Southern Union's
       Current Report on Form 8-K filed on December 30, 1999 and incorporated
       herein by reference.)
4.5    - Twenty-Sixth Supplemental Indenture dated as of December 1, 1992
       (Supplemental to Indenture dated as of March 15, 1946) between Southern
       Union Company (as successor to PG Energy, Inc. formerly Pennsylvania Gas
       and Water Company, and originally Scranton-Spring Brook Water Service
       Company) and Morgan Guaranty Trust Company of New York. (Filed as Exhibit
       4.3 to Southern Union's Current Report on Form 8-K filed on December 30,
       1999 and incorporated herein by reference.)
4.6    - Thirtieth Supplemental Indenture dated as of December 1, 1995
       (Supplemental to Indenture dated as of March 15, 1946) between Southern
       Union Company (as successor to PG Energy, Inc. formerly Pennsylvania Gas
       and Water Company, and originally Scranton-Spring Brook Water Service
       Company) and First Trust of New York, National Association (as successor
       trustee to Morgan Guaranty Trust Company of New York). (Filed as Exhibit
       4.4 to Southern Union's Current Report on Form 8-K filed on December 30,
       1999 and incorporated herein by reference.)
4.7    - Thirty-First Supplemental Indenture dated as of March 15, 1946) between
       Southern Union Company (successor to PG Energy, Inc., formerly
       Pennsylvania Gas and Water Company) and U. S. Bank Trust, National
       Association (formerly, First Trust of New York, National Association).
       (Filed as Exhibit 4.5 to Southern Union's Current Report on Form 8-K
       filed on December 30, 1999 and incorporated herein by reference.)
4.8    - Pennsylvania Gas and Water Company Bond Purchase Agreement dated
       September 1, 1989. (Filed as Exhibit 4.6 to Southern Union's Current
       Report on Form 8-K filed on December 30, 1999 and incorporated herein by
       reference.)
4.9    - Southern Union is a party to other debt instruments, none of which
       authorizes the issuance of debt securities in an amount which exceeds 10%
       of the total assets of Southern Union. Southern Union hereby agrees to
       furnish a copy of any of these instruments to the Commission upon
       request.

(5)    Opinion re Legality
5.1    - Opinion of Fleischman and Walsh, L.L.P. including the consent of such
       firm.




<PAGE>




(12)   Statements re Computation of Ratios
12-1   - Computation of Ratio of Earnings to Fixed Charges of Southern Union
       Company.
12-2   - Computation of Pro Forma Ratio of Earnings to Fixed Charges of Southern
       Union Company

(23)   Consents of Experts and Counsel
23-A - Consent of Independent Accountants, PricewaterhouseCoopers LLP.
23-B   - Consent of Fleischman and Walsh, L.L.P. is contained in the opinion of
       counsel filed as Exhibit 5.1

(24)   Powers of Attorney
24     - Power of Attorney of the Directors of the Registrant.

(25)   Statements of Eligibility of Trustees
25.1   - Statement of Eligibility under the Trust Indenture Act of 1939, as
       amended, of The Chase Manhattan Bank, as Trustee, under the Senior Debt
       Securities Indenture.





<PAGE>



                                                                     EXHIBIT 5-1



                     OPINION OF FLEISCHMAN AND WALSH, L.L.P.


                          FLEISCHMAN AND WALSH, L.L.P.
                           1400 Sixteenth Street, N.W.
                                   Sixth Floor
                              Washington, DC 20036
                                 (202) 939-7900


                                                                October 16, 2001


Southern Union Company
504 Lavaca Street, Suite 800
Austin, Texas  78701

Dear Ladies and Gentlemen:

We have acted as counsel to Southern Union Company, a Delaware corporation (the
"Company"), in connection with the preparation and filing with the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Act"), of a Registration Statement on Form S-3, as amended
(Commission File No. 333-_____) (the "Registration Statement"), relating to the
registration of $400,000,000 aggregate offering price of debt securities of the
Company (the "Debt Securities"), for issuance from time to time pursuant to Rule
415 under the Securities Act. The Debt Securities may be offered in amounts, at
prices and on terms to be determined by market conditions at the time of an
offering, and such amounts, prices, and terms will be set forth in a prospectus
supplement ("Supplement") to the prospectus included in the Registration
Statement ("Prospectus") at the time of an offering. Defined terms used, but not
defined herein, have the meaning given them in the Prospectus.

The Debt Securities will be issued as Senior Debt Securities pursuant to the
Senior Debt Securities Indenture in the form filed as Exhibit 4.1 to the
Registration Statement.

As counsel to the Company, we have examined: (i) the Registration Statement and
exhibits thereto and the Senior Debt Securities Indenture; (ii) the Company's
Restated Certificate of Incorporation and Bylaws; (iii) pertinent resolutions
adopted by the Company's Board of Directors or Committees thereof; and (iv) such
other documents and records of the Company, and such matters of law, as we have
considered necessary for the purpose of rendering this opinion. In our
examinations of documents submitted to us, we have assumed (i) the genuineness
of all such documents as originals and the conformity to original and certified
documents of all copies submitted to us as conformed or photocopied copies
thereof, (ii) the genuineness of all signatures thereon, (iii) the power and
authority of all signatories thereto and (iv) the due execution and delivery
thereof by all parties thereto. As to the various questions of fact material to
our opinion, we have relied upon representations, statements or certificates of
officers and representatives of the Company, and other persons with
responsibility for such matters.

Based upon and subject to the foregoing, we are of the following opinions:

1.     The Company has been duly incorporated and is validly existing in good
       standing under the laws of the State of Delaware.

2.     The Senior Debt Securities Indenture has been duly and validly
       authorized, executed and delivered by the Company.



<PAGE>




3.     Senior Debt Securities issued pursuant to the Registration Statement will
       constitute valid and binding obligations of the Company, assuming that
       their issuance and any applicable supplemental indenture or officer's
       certificate with respect thereto have been duly authorized by the
       Company, when (a) the Registration Statement and the applicable
       Supplement are effective under the Act, (b) any necessary supplemental
       indenture or officer's certificate with respect to the Senior Debt
       Securities Indenture has been duly executed and delivered by the Company
       and the Senior Debt Securities Trustee, (c) the terms of such Senior Debt
       Securities have been duly established in accordance with the Senior Debt
       Securities Indenture and any applicable supplemental indenture or
       officer's certificate with respect thereto, (d) such Senior Debt
       Securities have been duly executed and authenticated in accordance with
       the Senior Debt Securities Indenture and any applicable supplemental
       indenture or officer's certificate with respect thereto and (e) such
       Senior Debt Securities have been issued and delivered in accordance with
       the Registration Statement, including the Prospectus and the applicable
       Supplement.  Subject to the foregoing, such Senior Debt Securities will
       be enforceable in accordance with their terms against the Company, except
       as (x) the enforceability thereof may be limited by bankruptcy,
       insolvency, reorganization, fraudulent conveyance, moratorium or other
       similar laws now or hereafter in effect relating to or affecting the
       enforcement of creditors' rights generally and (y) the availability of
       equitable remedies may be limited by equitable principles of general
       applicability (regardless of whether considered in a proceeding at law or
       in equity).

The opinions expressed herein are subject to the following assumptions,
limitations, qualifications and exceptions:

       A.     The opinions are limited to the laws of the District of Columbia,
              applicable federal securities laws and the General Corporation Law
              of the State of Delaware. We assume no responsibility as to the
              applicability of the laws of any other jurisdiction to the subject
              transactions or the effect of such laws thereon.

       B.     We  express no opinion as to the effect on the Debt Securities of
              laws that limit the rate of interest that legally may be
              contracted for, charged or collected.

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading of "Legal
Matters" in the Prospectus and in any Supplement. In giving such consent, we do
not thereby concede that we are within the category of persons whose consent is
required under Section 7 of the Act or the Rules and Regulations of the
Commission thereunder.

Please be advised that Aaron I. Fleischman, Senior Partner of Fleischman and
Walsh, L.L.P., is a director of the Company, and that he, Fleischman and Walsh,
L.L.P., and certain other attorneys with Fleischman and Walsh, L.L.P., have
beneficial interests in shares of the Company's common stock.

If you have any questions regarding the opinions expressed herein, please
contact Stephen A. Bouchard, a partner with this firm, at (202) 939-7911.

Very truly yours,

FLEISCHMAN AND WALSH, L.L.P.






<PAGE>



                                                                    EXHIBIT 12-1



                       RATIO OF EARNINGS TO FIXED CHARGES



                                              Year Ended June 30,
                                ------------------------------------------------
                                  2001      2000      1999      1998      1997
                                --------  --------  --------  --------  --------
                                             (dollars in thousands)

EARNINGS:

Consolidated pre-tax income
 from continuing operations..   $ 96,683  $ 19,434  $ 17,554  $ 20,213  $ 31,405
Interest.....................    112,999    60,972    45,479    44,364    42,945
Net amortization of debt
 discount and premium and
 issuance expense............      3,739     1,242       965     1,029     1,122
Interest portion of rental
 expense.....................      3,851     3,863     2,876     2,252     2,528
                                --------  --------  --------  --------  --------

  Earnings..................    $217,272  $ 85,511  $ 66,874  $ 67,858  $ 78,000
                                ========  ========  ========  ========  ========

FIXED CHARGES:

Interest....................    $112,999  $ 60,972  $ 45,479  $ 44,364  $ 42,945
Net amortization of debt
 discount and premium and
 issuance expense...........       3,739     1,242       965     1,029     1,122
Interest portion of rental
 expense....................       3,851     3,863     2,876     2,252     2,528
                                --------  --------  --------  --------  --------

  Fixed charges.............    $120,589  $ 66,077  $ 49,320  $ 47,645  $ 46,595
                                ========  ========  ========  ========  ========

Ratio of earnings to fixed
 charges....................        1.80      1.29      1.36      1.42      1.67
                                ========  ========  ========  ========  ========





<PAGE>



                                                                    EXHIBIT 12-2




                  PRO FORMA RATIO OF EARNINGS TO FIXED CHARGES



                                                                   Pro Forma(a)
                                                                   ------------
                                                                    Year Ended
                                                                   June 30, 2001
                                                                   -------------
                                                                    (dollars in
                                                                     thousands)

EARNINGS:

Consolidated pre-tax earnings from continuing operations......      $    69,306
Interest......................................................          126,499
Net amortization of debt discount and premium and issuance
  expense.....................................................            3,739
Interest portion of rental expense............................            3,851
                                                                    -----------

     Earnings.................................................      $   203,395
                                                                    ===========

FIXED CHARGES:

Interest......................................................      $   126,499
Net amortization of debt discount and premium and issuance
  expense.....................................................            3,739
Interest portion of rental expense............................            3,851
                                                                    -----------

     Fixed charges............................................      $   134,089
                                                                    ===========

Ratio of earnings to fixed charges............................             1.52
                                                                    ===========



-----------------------------

(a)  This pro forma ratio gives effect as of the beginning of the period
     presented to: the application of the estimated net proceeds of this
     offering; and the acquisition of ProvEnergy, Valley Resources and Fall
     River Gas, which were primarily financed through a Term Note. The
     acquisitions of ProvEnergy, Valley Resources and Fall River Gas were
     assumed to occur as of the beginning of the period presented, as reflected
     in the Unaudited Pro Forma Combined Condensed Financial Statements.





<PAGE>



                                                                    Exhibit 23-A

                       CONSENT OF INDEPENDENT ACCOUNTANTS



We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of Southern Union Company ("Southern Union") of our report
dated August 7, 2001, except for Note IX as to which the date is September 19,
2001 relating to the consolidated financial statements, which appears in
Southern Union's Annual Report on Form 10-K for the year ended June 30, 2001. We
also consent to the reference to us under the heading "Experts" in such
Registration Statement.



                                 PRICEWATERHOUSECOOPERS LLP



Austin, Texas
October 18, 2001





<PAGE>



                                                                      Exhibit 24


                                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 (with respect
to the issuance of debt securities) 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:  October 17, 2001





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




FRANK W. DENIUS                              ROGER J. PEARSON
---------------                              ----------------
Frank W. Denius                              Roger J. Pearson




AARON I. FLEISCHMAN                          GEORGE ROUNTREE, III
-------------------                          --------------------
Aaron I. Fleischman                          George Rountree, III




KURT A. GITTER                               RONALD W. SIMMS
--------------                               ---------------
Kurt A. Gitter                               Ronald W. Simms




THOMAS F. KARAM                              DAN K. WASSONG
---------------                              --------------
Thomas F. Karam                              Dan K. Wassong




ADAM M. LINDEMANN
-----------------
Adam M. Lindemann




<PAGE>



                                                                    Exhibit 25.1



                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549


                                    FORM T-1

                            STATEMENT OF ELIGIBILITY
                    UNDER THE TRUST INDENTURE ACT OF 1939 OF
                   A CORPORATION DESIGNATED TO ACT AS TRUSTEE
                   -------------------------------------------

               CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
                A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
                    ----------------------------------------

                            THE CHASE MANHATTAN BANK
               (Exact name of trustee as specified in its charter)

New York                                                              13-4994650
(State of incorporation                                         (I.R.S. employer
if not a national bank)                                      identification No.)

270 Park Avenue
New York, New York                                                         10017
(Address of principal executive offices)                              (Zip Code)

                               William H. McDavid
                                 General Counsel
                                 270 Park Avenue
                            New York, New York 10017
                               Tel: (212) 270-2611
            (Name, address and telephone number of agent for service)
                  --------------------------------------------

                             SOUTHERN UNION COMPANY

Delaware                                                              75-0571592
(State or other jurisdiction of                                 (I.R.S. employer
incorporation or organization)                               identification No.)

504 Lavaca Street, Suite 800
Austin, Texas                                                              78701
 (Address of principal executive offices)                             (Zip Code)
                ------------------------------------------------

                       $400,000,000 SENIOR DEBT SECURITIES





<PAGE>



                                     GENERAL



Item 1.   General Information.

          Furnish the following information as to the trustee:

          (a)    Name and address of each examining or supervising authority to
                 which it is subject.

                 New York State Banking Department, State House, Albany, New
                 York  12110.

                 Board of Governors of the Federal Reserve System, Washington,
                 D.C., 20551

                 Federal Reserve Bank of New York, District No. 2, 33 Liberty
                 Street, New York, N.Y.

                 Federal Deposit Insurance Corporation, Washington, D.C., 20429.


          (b)    Whether it is authorized to exercise corporate trust powers.

                 Yes.


Item 2.   Affiliations with the Obligor.

          If the obligor is an affiliate of the trustee, describe each such
          affiliation.

          None.





<PAGE>



Item 16.     List of Exhibits

             List below all exhibits filed as a part of this Statement of
             Eligibility.

             1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).

             2. A copy of the Certificate of Authority of the Trustee to
Commence Business (see Exhibit 2 to Form T-1 filed in connection with
Registration Statement No. 33-50010, which is incorporated by reference. On
July 14, 1996, in connection with the merger of Chemical Bank and The Chase
Manhattan Bank (National Association), Chemical Bank, the surviving corporation,
was renamed The Chase Manhattan Bank).

             3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.

             4.  A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-76439, which is
incorporated by reference).

             5.  Not applicable.

             6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).

             7.  A copy of the latest report of condition of the Trustee,
published pursuant to law or the requirements of its supervising or examining
authority.

             8.  Not applicable.

             9.  Not applicable.

                                    SIGNATURE

             Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 11th day of October, 2001.

                                 THE CHASE MANHATTAN BANK

                                 By    /s/  Philbert G. Jones
                                     ------------------------
                                       /s/  Philbert G. Jones
                                            Assistant Vice President




<PAGE>



                              Exhibit 7 to Form T-1


                                Bank Call Notice

                             RESERVE DISTRICT NO. 2
                       CONSOLIDATED REPORT OF CONDITION OF

                            The Chase Manhattan Bank
                  of 270 Park Avenue, New York, New York 10017
                     and Foreign and Domestic Subsidiaries,
                     a member of the Federal Reserve System,

                   at the close of business June 30, 2001, in
         accordance with a call made by the Federal Reserve Bank of this
         District pursuant to the provisions of the Federal Reserve Act.


                                                                  Dollar Amounts
                      ASSETS                                        in Millions

Cash and balances due from depository institutions:
      Noninterest-bearing balances and currency and coin.......     $ 21,536
      Interest-bearing balances................................       31,428
Securities:
      Held to maturity securities..............................          481
      Available for sale securities............................       60,903
      Federal funds sold and securities purchased under
           agreements to resell................................       42,824
Loans and lease financing receivables:
      Loans and leases held for sale...........................        3,856
      Loans and leases, net of unearned income.....  $  155,575
      Less: Allowance for loan and lease losses....       2,276
      Loans and leases, net of unearned income and allowance...      153,299
Trading Assets.................................................       66,636
Premises and fixed assets (including capitalized leases).......        4,468
Other real estate owned........................................           45
Investments in unconsolidated subsidiaries and associated
     companies.................................................          353
Customers' liability to this bank on acceptances outstanding...          346
Intangible assets:
      Goodwill.................................................        1,785
      Other intangible assets..................................        4,365
Other assets...................................................       19,923
                                                                    --------
TOTAL ASSETS...................................................     $412,248
                                                                    ========






<PAGE>


                                     LIABILITIES

Deposits
      In domestic offices......................................     $137,865
      Noninterest-bearing.........................    $  56,799
      Interest-bearing............................       81,066
      In foreign offices, Edge and Agreement subsidiaries and
           IBF's...............................................      113,924
      Noninterest-bearing.........................    $   6,537
      Interest-bearing............................      107,387
Federal funds purchased and securities sold under agreements
           to repurchase.......................................       65,474
Trading liabilities............................................       39,611
Other borrowed money (includes mortgage indebtedness and
      obligations under capitalized leases)....................       10,573
Bank's liability on acceptances executed and outstanding.......          346
Subordinated notes and debentures..............................        6,355
Other liabilities..............................................       14,772
TOTAL LIABILITIES..............................................      388,920
Minority Interest in consolidated subsidiaries.................           89

                                  EQUITY CAPITAL

Perpetual preferred stock and related surplus....................          0
Common stock.....................................................      1,211
Surplus  (exclude all surplus related to preferred stock)........     12,715
      Retained earnings..........................................      9,985
      Accumulated other comprehensive income.....................       (672)
Other equity capital components..................................          0
TOTAL EQUITY CAPITAL.............................................     23,239
                                                                    --------

TOTAL LIABILITIES, MINORITY INTEREST, AND EQUITY CAPITAL.........   $412,248
                                                                    ========

I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.

                                     JOSEPH L. SCLAFANI

We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.

                                     WILLIAM B. HARRISON, JR.   )
                                     DOUGLAS A. WARNER, III     )  DIRECTORS
                                     WILLIAM H. GRAY, III       )




<PAGE>