**EXHIBIT      10.2**

**STATE      OF ILLINOIS**

**ILLINOIS      COMMERCE COMMISSION**

| **Illinois                  Commerce Commission**               |   | **:** |        |
|-----------------------------------------------------------------|--------|-------|-------------|
| **On                  Its Own Motion**                          |   | **:** |        |
|                                                            |   | **:** |        |
| **v.**                                                          |   | **:** | **02-0726** |
|                                                            |   | **:** |        |
| **North                  Shore Gas Company**                    |   | **:** |        |
|                                                            |   | **:** |        |
| **Reconciliation                  of revenues collected under** |   | **:** |        |
| **gas                  adjustment charges with actual**         |   | **:** |        |
| **costs                  prudently incurred**                   |   | **:** |        |

**ORDER**

**I.**
**The      Settlement**

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**II.**
**Legal      Basis for Approval of the Settlement**

*Business      and Professional Peoples for the Public Interest v. Illinois Commerce      Commission*
*BPI*

**III.**
**Terms      of the Settlement**

**A.**
**Distribution      of the $100 Million Refund**

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| §   | The                number of customers receiving service on each Service Classification                as of                the date this Order is entered, |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | The                usage of PGA gas by each Service Classification during the Reconciliation                Periods, and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------|

| §   | The                amount of the refund to be credited to each customer during the next                30-day billing cycle. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------|

| §   | The                number of current and former customers that held customer accounts                and                consumed PGA gas during the Reconciliation Periods, |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | The                amount of PGA gas consumed during the Reconciliation Periods by each                current and former customer account, |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------|

| §   | An                indication of whether former SC No. 3 customers are still a going                concern,                and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------|

| §   | The                amount to be refunded to each current and former customer account                that                received service during the Reconciliation                Periods. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**B.**
**Accounting      Proposals Adopted from the ALJPO in Docket No. 01-**
**0707**

*et.      seq.*

|   | (7) | Peoples                Gas Light and Coke Company shall update its operating agreement,                which was                approved by this Commission in Docket No. 55071, prior to filing                its                petition with the ICC for its next rate case or within sixty days                after                the date a final order is entered in this docket, whichever occurs                first; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | (8) | Peoples                Gas Light and Coke Company shall account for all gas physically injected                into Manlove Field by including the cost associated with maintenance                gas                in the amount transferred from purchased gas expense to the gas stored                underground account, Account 164.1; |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (9) | Peoples                Gas Light and Coke Company shall account for the portion of gas injected                into the Manlove Storage Field to maintain pressure, as credits from                Account 164.1, Gas Stored Underground, as charges to Account 117,                Gas                Stored Underground, in the case of recoverable cushion gas, or to                Account                101, in the case of non-recoverable portions of cushion                gas; |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (11) | Peoples                Gas Light and Coke Company shall revise its maintenance gas accounting                procedures related to gas injected for the benefit of the North Shore                Gas                Company and third-parties to require those entities to bear the cost                of                maintenance gas, and it shall revise its maintenance gas accounting                procedures to ensure that all customers/consumers bear equal                responsibility for maintenance gas; |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (12) | Peoples                Gas Light and Coke Company shall submit its revised maintenance gas                accounting procedures to the Commission’s Chief Clerk with a copy to the                Manager of the Accounting Department within 30 days after the date,                upon                which, a final Order is entered in this                docket; |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (14) | Peoples                Gas Light and Coke Company shall submit quarterly reports reflecting                its                use of journal entries regarding maintenance gas to the Manager of                this                Commission’s Accounting Department within 45 days of the end of each                quarter, after the date of a final order is entered in this docket,                through the quarter ending September 30,                2009; |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | (15) | Peoples                Gas Light and Coke Company shall engage outside consultants to perform                a                management audit of its gas purchasing practices, gas storage operations                and storage activities. The firm selected to perform the management                audit                shall be independent of Peoples Gas Light and Coke Company, its                affiliates, Staff, and all parties in this docket, and approved by                this                Commission. Monthly reporting of the progress of the conduct of the                management audit shall be submitted to the Bureau Chief of the                Commission’s Public Utilities Bureau, with a copy to the Manager of the                Commission’s Accounting Department, until the management audit report has                been submitted. Completion of this management audit shall occur no                later                than eighteen months after the date, upon which, a final order is                entered                in this docket. Upon completion, copies of the management audit reports                shall be submitted to the Commission’s Public Utilities Bureau Chief and                the Manager of the Commission’s Accounting                Department; |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**C.**
**Hardship      Reconnection Program**

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**D.**
**Gas      Reconciliation**

| 1.  Unamortized                Balance at 9/30/01 per 2001 reconciliation                (Refund)/Recovery                       |   | $      | (6,073,031.57 | )      |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------------|--------|
| 2.  Factor                A Adjustments Amortized to Sch. I at 09/30/01 per 2001 reconciliation                (Refund)/Recovery |   |   | (3,296,514.13 | )      |
| 3.  Factor                O (Refunded)/Recovered during 2001                                                                     |   |   | 0             |   |
| 4.  Balance                to be (Refunded)/Recovered during 2002 from prior periods                                             |   |   | (9,369,545.70 | )      |
| 5.  2002                PGA Recoverable Costs                                                                                    |   |   | 95,184,373.94 |   |
| 6.  2002                PGA Actual Recoveries                                                                                    |   |   | 82,653,666.47 |   |
| 7.  Interest                                                                                                                     |   |   | (7,342.32     | )      |
| 8.  Other                Adjustments                                                                                             |   |   | 0             |   |
| 9.  Pipeline                Refunds                                                                                              |   |   | 0             |   |
| 10.   (Over)/Under                Recovery for 2002                                                                         |   |   | 12,523,365.15 |   |
| 11.   PGA                Reconciliation Balance at 9/30/02 (Over)/Under                Collected                            |   |   | 3,153,819.45  |   |
| 12.  Factor                A Adjustments unreconciled at 9/30/02 (Refund)/Recovery                                               |   |   | 1,009,785.91  |   |
| 13.                  Unamortized                Balance at 9/30/02 (Refund)/Recovery                                             |   | $      | 2,144,033.54  |   |
| 14.  Requested                Ordered Reconciliation Factor to be (Refunded)/Recovered [Factor                O]                 |   |   | 0             |   |

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**E.**
**Commission      Analysis and Conclusions **

**IV.**
**Findings      and Ordering Paragraphs**

| (1)                 | North                Shore Gas Company is                a corporation engaged in the distribution of natural gas service                to the                public in Illinois and, as such, is a public utility within the meaning                of                the Public Utilities Act; |
|-------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)                 | the                Commission has jurisdiction over Respondent and of the subject matter                of                this proceeding; |
|-------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------|

| (3)                 | the                Settlement (Exhibit 1) as revised by the Addendum (Exhibit 2) is                adopted                and their terms incorporated herein as a settlement of allegations                that,                during the reconciliation period, Respondent had not acted reasonably                and                prudently in its purchases of natural gas and other activities that                affected the amounts collected through Gas Charges in its fiscal                year                2002; |
|-------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)                 | the                unamortized balances at the end of Respondent’s 2002 reconciliation year                show a recoverable balance for the Commodity Gas Charge of $867,888.08;                a                recoverable balance of $1,266,563.19 for the Non-Commodity Gas Charge                and                the Demand Gas Charge; and a recoverable balance of $9,582.27 for                the                Transition Surcharge, for a total refundable balance of $2,144,033.54;                the                Factor O refund is zero; |
|-------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5)                 | the                reconciliations submitted by North Shore Gas Company of the costs                actually                incurred for the purchase of natural gas with revenues received for                such                gas for the reconciliation period beginning October 1, 2001, through                September 30, 2002, may properly be approved; |
|-------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (6)                 | pursuant                to the Settlement, a refund of $100 million is to be distributed                in the                manner set forth above as part of the consideration paid in global                settlement of this docket as well as I.C.C. Docket Nos. 01-0706,                01-0707,                02-0727, 03-0704, 03-0705, 04-0682 and                04-0683. |
|-------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7)                 | North                Shore Gas Company should follow the accounting procedures recited                above,                the directives contained in the incorporated parts of the settlement                agreement and the addendum thereto in all future gas adjustment charge                reconciliation dockets; |
|-------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (8)                 | North                Shore Gas Company shall file quarterly reports with the Chief Clerk’s                office detailing the progress of the Hardship Reconnection                program. |
|-------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**North      Shore Gas Company**

**Gas      Charge Reconciliation Summary**

**Fiscal      2002**

|                                                                                                                                               | CommodityGas                Charges(CGC) | Non-Commodity                Gas Chargeand                Demand Gas Charge(NCGC                and DGC) | TransitionSurcharge(TS) | TotalGas                Charge |
|----------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------|----------------------------------------------------------------------------------------------------------|-------------------------|--------------------------------|
| Line                                                                                                                                               |                                     |                                                                                                     |                    |                           |
| **Fiscal                2001**                                                                                                                     |                                     |                                                                                                     |                    |                           |
| 1  Unamortized                Balance at September 30, 2001(Refund)                / Recovery                                            | ($7,981,620.48)                          | $1,899,343.69                                                                                            | $9,245.22               | ($6,073,031.57)                |
| 2  Factor                A Adjustments unreconciled at September 30, 2001 (Refund) / Recovery                                            | ($3,759,617.73)                          | $461,404.94                                                                                              | $1,698.66               | ($3,296,514.13)                |
| 3  Factor                O(Refunded)                / Recovered                                                                          | $0.00                                    | $0.00                                                                                                    | $0.00                   | $0.00                          |
| **4**  **Balance                (Refundable) / Recoverable from Prior Periods (Line 1 + Line 2 +                Line                3)** | ($11,741,238.21)                         | $2,360,748.63                                                                                            | $10,943.88              | ($9,369,545.70)                |
| **Fiscal                2002**                                                                                                                     |                                     |                                                                                                     |                    |                           |
|  5  Costs                Recoverable                through the Gas Charge                                                          | $77,589,730.15                           | $17,594,643.79                                                                                           | $0.00                   | $95,184,373.94                 |
|  6   Revenues                Arising                though Application of the Gas Charge                                       | $64,464,994.84                           | $18,188,675.70                                                                                           | ($4.08)                 | $82,653,666.47                 |
|  7   Separately                Reported                Pipeline Refunds or Surcharges                                          | $0.00                                    | $0.00                                                                                                    | $0.00                   | $0.00                          |
|  8   Separately                Reported                Other Adjustments                                                       | $0.00                                    | $0.00                                                                                                    | $0.00                   | $0.00                          |
|  9   Interest                Calculated                at 6.00% thru Dec. 2001; 2.00% thereafter                               | ($20,825.26)                             | $13,266.55                                                                                               | $216.39                 | ($7,342.32)                    |
|  10  (Over)                / Under Recovery for Reconciliation Year(Line                5 - Line 6 + Line 7 + Line 8 + Line 9)      | $13,103,910.04                           | ($580,765.36)                                                                                            | $220.47                 |  $12,523,365.15           |
| 11  (Over)                / Under Recovery Balance for Reconciliation Year (Line 4 + Line                10)                             | $1,362,671.83                            | $1,779,983.27                                                                                            | $11,164.35              | $3,153,819.45                  |
| 12  Factor                A Adjustments unreconciled at September 30, 2002 (Refund) / Recovery                                           | $494,783.75                              | $513,420.08                                                                                              | $1,582.08               | $1,009,785.91                  |
| 13  Unamortized                Balance at September 30, 2002(Refund)                / Recovery (Line 11 - Line 12)                       | $867,888.08                              | $1,266,563.19                                                                                            | $9,582.27               | $2,144,033.54                  |
| 14  Requested                Factor O (Line 11 - Line 12 - Line 13) (Refund) / Recovery                                                  | $0.00                                    | $0.00                                                                                                    | $0.00                   | $0.00                          |

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