**EXHIBIT      10(a)**

**Execution      Version**

|     **CREDIT                AGREEMENT**  **DATED                AS OF** **June 13,                2006**   **AMONG**   **PEOPLES                ENERGY CORPORATION,** **THE                FINANCIAL INSTITUTIONS PARTY HERETO,****as                Banks,** **BANK                OF AMERICA, N.A.,****as                Administrative Agent,** **JPMORGAN                CHASE BANK, N.A.,****as                Syndication Agent,** **ABN                AMRO INCORPORATED,****US                BANK NATIONAL ASSOCATION,****and****THE                BANK OF TOKYO-MITSUBISHI, LTD. CHICAGO BRANCH,****as                Co-Documentation Agents,** **and** **BANC                OF AMERICA SECURITIES LLC,****J.P.                MORGAN SECURITIES INC.,****and****ABN                AMRO INCORPORATED,****as                Co-Lead Arrangers and Joint Bookrunners**   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                      | Page                                                                                                                                    |
|---------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------|
| SECTION                  1.  DEFINITIONS; INTERPRETATION.       | 1                                                                                                                                       |
|                                                                      | Section                  1.1  Definitions                                                                                     | 1 |
|                                                                      | Section                  1.2  Interpretation                                                                                  | 7 |
| SECTION                  2.  THE REVOLVING CREDIT.              | 7                                                                                                                                       |
|                                                                      | Section                  2.1  The Loan Commitment, Increase Option, Extension                  Option.                        | 7 |
|                                                                      | Section                  2.2  Letters of Credit                                                                               | 9 |
|                                                                      | Section                  2.3  Applicable Interest Rates                                                                       | 11 |
|                                                                      | Section                  2.4  Minimum Borrowing Amounts                                                                       | 13 |
|                                                                      | Section                  2.5  Manner of Borrowing Loans and Designating Interest Rates                  Applicable to Loans.  | 13 |
|                                                                      | Section                  2.6  Interest Periods                                                                                | 15 |
|                                                                      | Section                  2.7  Maturity of Loans                                                                               | 15 |
|                                                                      | Section                  2.8  Prepayments                                                                                     | 15 |
|                                                                      | Section                  2.9  Default Rate.                                                                                   | 16 |
|                                                                      | Section                  2.10  Evidence of Debt.                                                                              | 16 |
|                                                                      | Section                  2.11  Funding Indemnity                                                                              | 17 |
|                                                                      | Section                  2.12  Revolving Credit Commitment Terminations                                                       | 17 |
|                                                                      | Section                  2.13  Regulation D Compensation                                                                 | 17 |
|                                                                      | Section                  2.14  Arbitrage Compensation                                                                         | 18 |
| SECTION                  3.  FEES.                              | 18                                                                                                                                      |
|                                                                      | Section                  3.1  Fees                                                                                            | 18 |
|                                                                      | Section                  3.2  Replacement of Banks                                                                            | 19 |
| SECTION                  4.  PLACE AND APPLICATION OF PAYMENTS. | 20                                                                                                                                      |
|                                                                      | Section                  4.1  Place and Application of Payments                                                               | 20 |
| SECTION                  5.  REPRESENTATIONS AND WARRANTIES.    | 20                                                                                                                                      |
|                                                                      | Section                  5.1  Corporate Organization and Authority                                                            | 20 |
|                                                                      | Section                  5.2  Corporate Authority and Validity of                  Obligations                                | 20 |
|                                                                      | Section                  5.3  Financial Statements                                                                            | 21 |
|                                                                      | Section                  5.4  Approvals                                                                                       | 21 |
|                                                                      | Section                  5.5  ERISA                                                                                           | 21 |
|                                                                      | Section                  5.6  Government Regulation                                                                           | 21 |
|                                                                      | Section                  5.7  Margin Stock; Proceeds                                                                          | 21 |
|                                                                      | Section                  5.8  Full Disclosure                                                                                 | 21 |
| SECTION                  6.  CONDITIONS PRECEDENT.              | 22                                                                                                                                      |
|                                                                      | Section                  6.1  Initial Credit Event                                                                            | 22 |
|                                                                      | Section                  6.2  All Credit Events                                                                               | 23 |
| SECTION                  7.  COVENANTS.                         | 23                                                                                                                                      |
|                                                                      | Section                  7.1  Corporate Existence                                                                             | 23 |
|                                                                      | Section                  7.2  ERISA                                                                                           | 23 |
|                                                                      | Section                  7.3  Financial Reports and Other Information                                                         | 24 |
|                                                                      | Section                  7.4  Regulation U; Proceeds                                                                     | 25 |
|                                                                      | Section                  7.5  Sales of Assets.                                                                                | 25 |
|                                                                      | Section                  7.6  Capital Ratio                                                                                   | 25 |
|                                                                      | Section                  7.7  Compliance with Laws                                                                            | 25 |
|                                                                      | Section                  7.8  Mergers and Consolidations                                                                      | 26 |
| SECTION                  8.  EVENTS OF DEFAULT AND REMEDIES.    | 26                                                                                                                                      |
|                                                                      | Section                  8.1  Events of Default                                                                               | 26 |
|                                                                      | Section                  8.2  Non-Bankruptcy Defaults                                                                         | 27 |
|                                                                      | Section                  8.3  Bankruptcy Defaults                                                                             | 27 |
|                                                                      | Section                  8.4  Expenses                                                                                        | 27 |
| SECTION                  9.  CHANGE IN CIRCUMSTANCES.           | 28                                                                                                                                      |
|                                                                      | Section                  9.1  Change of Law                                                                                   | 28 |
|                                                                      | Section                  9.2  Unavailability of Deposits or Inability to Ascertain, or                  Inadequacy of, LIBOR. | 28 |
|                                                                      | Section                  9.3  Increased Cost and Reduced Return                                                               | 28 |
|                                                                      | Section                  9.4   Lending Offices                                                                                | 30 |
|                                                                      | Section                  9.5  Discretion of Bank as to Manner of Funding                                                      | 30 |
| SECTION                  10.  THE ADMINISTRATIVE AGENT.         | 30                                                                                                                                      |
|                                                                      | Section                  10.1  Appointment and Authority                                                                      | 30 |
|                                                                      | Section                  10.2  Rights as a Bank                                                                               | 31 |
|                                                                      | Section                  10.3  Exculpatory Provisions                                                                         | 31 |
|                                                                      | Section                  10.4  Reliance by Administrative Agent.                                                              | 31 |
|                                                                      | Section                  10.5  Delegation of Duties.                                                                          | 32 |
|                                                                      | Section                  10.6  Resignation of Administrative Agent.                                                           | 32 |
|                                                                      | Section                  10.7  Non-Reliance on Administrative Agent and Other                  Banks                          | 33 |
|                                                                      | Section                  10.8  No Other Duties; Etc.                                                                          | 33 |
|                                                                      | Section                  10.9  Administrative Agent May File Proofs of                  Claim.                                | 33 |
| SECTION                  11.  MISCELLANEOUS.                    | 34                                                                                                                                      |
|                                                                      | Section                  11.1  Withholding Taxes                                                                              | 34 |
|                                                                      | Section                  11.2  No Waiver of Rights                                                                            | 35 |
|                                                                      | Section                  11.3  Non-Business Day                                                                               | 35 |
|                                                                      | Section                  11.4  Documentary Taxes                                                                              | 35 |
|                                                                      | Section                  11.5  Survival of Representations                                                                    | 35 |
|                                                                      | Section                  11.6  Survival of Indemnities                                                                        | 35 |
|                                                                      | Section                  11.7  Set-Off                                                                                        | 35 |
|                                                                      | Section                  11.8  Notices; Effectiveness, Electronic                  Communications.                            | 36 |
|                                                                      | Section                  11.9  Counterparts                                                                                   | 38 |
|                                                                      | Section                  11.10  Successors and Assigns                                                                   | 38 |
|                                                                      | Section                  11.11  [Intentionally Omitted]                                                                  | 38 |
|                                                                      | Section                  11.12  Assignments, Participations, Etc                                                         | 38 |
|                                                                      | Section                  11.13  Amendments                                                                               | 41 |
|                                                                      | Section                  11.14  Headings                                                                                 | 42 |
|                                                                      | Section                  11.15  Legal Fees, Other Costs and Indemnification                                              | 42 |
|                                                                      | Section                  11.16  [Reserved]                                                                               | 42 |
|                                                                      | Section                  11.17  Entire Agreement                                                                         | 42 |
|                                                                      | Section                  11.18  Construction                                                                             | 42 |
|                                                                      | Section                  11.19  Governing Law                                                                            | 42 |
|                                                                      | Section                  11.20  SUBMISSION TO JURISDICTION; WAIVER OF JURY                  TRIAL                        | 42 |
|                                                                      | Section                  11.21  Confidentiality                                                                          | 42 |
|                                                                      | Section                  11.22  Patriot Act                                                                              | 42 |
|                                                                      | Section                  11.23  Rights and Liabilities of Syndication Agent and                  Arrangers               | 43 |
|                                                                      | Section                  11.24  No Advisory or Fiduciary Responsibility                                                  | 43 |

----

**SCHEDULES**

| 1.1   |   | Interest                  Rates and Fees         |
|-------|--------|--------------------------------------------------|
| 2.1   |   | Revolving                  Credit Commitment     |
| 11.8  |   | Notices                                          |
| 11.12 |   | Processing                  and Recordation Fees |

**EXHIBITS**

***Form      of***

| 2.10  |   | Note                                       |
|-------|--------|--------------------------------------------|
| 6.1   |   | Opinion                                    |
| 7.3   |   | Compliance                  Certificate    |
| 11.12 |   | Assignment                  and Assumption |

----

**CREDIT      AGREEMENT**

**CREDIT      AGREEMENT,**
*Borrower*
*Bank*
*Banks*
*Administrative*
*Agent*
*Syndication      Agent*

**WITNESSETH      THAT:**

**WHEREAS,**
*Revolving      Credit*

**WHEREAS,**

**NOW,      THEREFORE,**

**SECTION      **
**1**
**.**
**DEFINITIONS;      INTERPRETATION.**

**Section      **
**1**
**.**
**1**
**Definitions**

*Administrative*
*Agent*

*Administrative      Agent's Office*

*“Administrative      Questionnaire”*

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

*Agreement*

----

*Applicable      Margin*

*Application*

*“Approved      Fund”*

*“Arrangers”      *

*Assignee      Group*

*“Assignment      and Assumption”*

*Authorized      Representative*

*Bank*

*Bank      of America*

*Base      Rate*

*Base      Rate Loan*

*Base      Rate Margin*

*BofA      Fee Letter*

*Borrower*

*Borrower      Materials*

*Borrowing*

----

*Business      Day*

*Capital*

*Capital      Lease*

*Capital      Ratio*

*Capitalized      Lease Obligations*

*Code*

*Commitment*

*Commitment      Fee Rate” *

*Compliance      Certificate*

*Consolidated      Indebtedness*

*Consolidated*
*Net      Worth*

*Contractual      Obligation*

*Controlled      Group*

*Credit      Documents*

*Credit      Event*

----

*Credit      Rating*

*Default*

*Effective      Date*

*“Eligible      Assignee”*

*ERISA*

*Event      of Default*

*Existing      Credit Agreement*

*Federal      Funds Rate*

*Fee      Letters*

*“Fund”      *

*GAAP*

*Granting      Bank*

*Guarantee*

*Indebtedness*

----

*Information*

*Interest      Period*

*“Issuing      Banks” *
*provided*

*Joint      Fee Letter*

*“L/C      Documents” *

*“L/C      Fee Rate” *

*“L/C      Obligations*
*.*

*Lending      Office*

*Letter      of Credit*

*LIBOR*

*LIBOR      Loan*

*LIBOR      Margin*

*LIBOR      Reserve Percentage*

*Lien*

----

*Loan*

*Master      Letter of Credit Agreement*

*Material      Adverse Effect*

*Note*

*Obligations*

*“Participant”*

*Percentage*

*Person*

*Plan*

*“Platform”*

*PBGC*

*Property*

*Refusing      Bank*

*Reimbursement      Obligation*

----

*Related      Parties*

*Required      Banks*

*Revolving      Credit Commitment*

*SEC*

*SPC*

*Subsidiary*

*Syndication      Agent*

*Termination      Date*
*provided,      however*

*Unfunded      Vested Liabilities*

*U.S.      Dollars*
*$*

*Welfare      Plan*

**Section      **
**1**
**.**
**2**
**Interpretation**

**SECTION      **
**2**
**.**
**THE      REVOLVING CREDIT.**

**Section      **
**2**
**.**
**1**
**The      Loan Commitment, Increase Option, Extension Option**

*The      Loan Commitment*
*Loan*
*Loans*
*Revolving      Credit Commitment*
*Revolving      Credit Commitments*
*provided*

----

*Increase      Option*
*provided*
*Additional      Bank*
*provided*

*Extension      Option*

*provided*

----

** **

**Section      **
**2**
**.**
**2**
**Letters      of Credit**

*General      Terms*
*“Letter      of Credit”*
*provided*
*pro      rata *
*“Master      Letter of Credit Agreement”*
*L/C      Sublimit*

*Applications*
*“Application”*

----

*The      Reimbursement Obligations*
*“Reimbursement      Obligation”*

*The      Participating Interests*
*“Participating      Interest”*

----

*Indemnification*

*Issuing      Banks*

**Section      **
**2**
**.**
**3**
**Applicable      Interest Rates**

*Base      Rate Loans*

*Base      Rate*

*provided*

----

*LIBOR      Loans*

*LIBOR      Rate*

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

*Rate      Determinations*

----

**Section      **
**2**
**.**
**4**
**Minimum      Borrowing Amounts**
*provided*

**Section      **
**2**
**.**
**5**
**Manner      of Borrowing Loans and Designating Interest Rates Applicable to      Loans**

*Notice      to the Administrative Agent.*
*provided*

*Notice      to the Banks*

----

*Borrower’s      Failure to Notify*

*Disbursement      of Loans*

*Administrative      Agent Reliance on Bank Funding*
*provided*

----

**Section      **
**2**
**.**
**6**
**Interest      Periods**
*Interest      Period*
*provided*
*however*

*provided*

*provided*
*however*

**Section      **
**2**
**.**
**7**
**Maturity      of Loans**

**Section      **
**2**
**.**
**8**
**Prepayments**

----

**Section      **
**2**
**.**
**9**
**Default      Rate**

**Section      **
**2**
**.**
**10**
**Evidence      of Debt**
**.**
*** ***
** **

*Note*
*Notes*

*;      provided, however*

----

**Section      **
**2**
**.**
**11**
**Funding      Indemnity**

**Section      **
**2**
**.**
**12**
**Revolving      Credit Commitment Terminations**
*provided*

**Section      **
**2**
**.**
**13**
**Regulation D      Compensation**

----

**Section      **
**2**
**.**
**14**
**Arbitrage      Compensation**
*CP      Rate*
*Arbitrage      Condition*

**SECTION      **
**3**
**.**
**FEES.**

**Section      **
**3**
**.**
**1**
**Fees**

*Commitment      Fee*

*Letter      of Credit Fees*

----

*Administrative      Agent Fees*

*Arranger      Fees*

*Participation      Fee*

*Fee      Calculations*

**Section      **
**3**
**.**
**2**
**Replacement      of Banks**
*Subject      Bank*
*Proposed      Bank*
*provided*

----

**SECTION      **
**4**
**.**
**PLACE      AND APPLICATION OF PAYMENTS.**

**Section      **
**4**
**.**
**1**
**Place      and Application of Payments**

**SECTION      **
**5**
**.**
**REPRESENTATIONS      AND WARRANTIES.**

**Section      **
**5**
**.**
**1**
**Corporate      Organization and Authority**

**Section      **
**5**
**.**
**2**
**Corporate      Authority and Validity of Obligations**

----

**Section      **
**5**
**.**
**3**
**Financial      Statements**

**Section      **
**5**
**.**
**4**
**Approvals**

**Section      **
**5**
**.**
**5**
**ERISA**
*ERISA*
*PBGC*

**Section      **
**5**
**.**
**6**
**Government      Regulation**
*investment      company*

**Section      **
**5**
**.**
**7**
**Margin      Stock; Proceeds**
*margin      stock*

**Section      **
**5**
**.**
**8**
**Full      Disclosure**

----

**SECTION      **
**6**
**.**
**CONDITIONS      PRECEDENT.**

**Section      **
**6**
**.**
**1**
**Initial      Credit Event**

----

**Section      **
**6**
**.**
**2**
**All      Credit Events**

**SECTION      **
**7**
**.**
**COVENANTS.**

**Section      **
**7**
**.**
**1**
**Corporate      Existence**
* *

**Section      **
**7**
**.**
**2**
**ERISA**

----

**Section      **
**7**
**.**
**3**
**Financial      Reports and Other Information**

----

*i.e.,*

**Section      **
**7**
**.**
**4**
**Regulation U;      Proceeds**

**Section      **
**7**
**.**
**5**
**Sales      of Assets**

**Section      **
**7**
**.**
**6**
**Capital      Ratio**

**Section      **
**7**
**.**
**7**
**Compliance      with Laws**
*provided*
*however*

----

**Section      **
**7**
**.**
**8**
**Mergers      and Consolidations**

**SECTION      **
**8**
**.**
**EVENTS      OF DEFAULT AND REMEDIES.**

**Section      **
**8**
**.**
**1**
**Events      of Default**

----

*Material      Plan*

**Section      **
**8**
**.**
**2**
**Non-Bankruptcy      Defaults**

**Section      **
**8**
**.**
**3**
**Bankruptcy      Defaults**

**Section      **
**8**
**.**
**4**
**Expenses**

----

**SECTION      **
**9**
**.**
**CHANGE      IN CIRCUMSTANCES.**

**Section      **
**9**
**.**
**1**
**Change      of Law**
*provided*
*however*

**Section      **
**9**
**.**
**2**
**Unavailability      of Deposits or Inability to Ascertain, or Inadequacy of,      LIBOR**
** **

**Section      **
**9**
**.**
**3**
**Increased      Cost and Reduced Return**

----

----

**Section      **
**9**
**.**
**4**
** **
**Lending      Offices**
*Lending      Office*

**Section      **
**9**
**.**
**5**
**Discretion      of Bank as to Manner of Funding**

**SECTION      **
**10**
**.**
**THE      ADMINISTRATIVE AGENT.**

**Section      **
**10**
**.**
**1**
**Appointment      and Authority**
** **

----

**Section      **
**10**
**.**
**2**
**Rights      as a Bank**

**Section      **
**10**
**.**
**3**
**Exculpatory      Provisions**
**.**

**Section      **
**10**
**.**
**4**
**Reliance      by Administrative Agent.**

----

**Section      **
**10**
**.**
**5**
**Delegation      of Duties**
**.**

**Section      **
**10**
**.**
**6**
**Resignation      of Administrative Agent**
**.**

----

**Section      **
**10**
**.**
**7**
**Non-Reliance      on Administrative Agent and Other Banks**
**.**

**Section      **
**10**
**.**
**8**
**No      Other Duties; Etc**
**.**

**Section      **
**10**
**.**
**9**
**Administrative      Agent May File Proofs of Claim**
**.**

----

**SECTION      **
**11**
**.**
**MISCELLANEOUS.**

**Section      **
**11**
**.**
**1**
**Withholding      Taxes**

*Payments      Free of Withholding*

*U.S.      Withholding Tax Exemptions*

*Inability      of Bank to Submit Forms*

----

**Section      **
**11**
**.**
**2**
**No      Waiver of Rights**

**Section      **
**11**
**.**
**3**
**Non-Business      Day**

**Section      **
**11**
**.**
**4**
**Documentary      Taxes**

**Section      **
**11**
**.**
**5**
**Survival      of Representations**

**Section      **
**11**
**.**
**6**
**Survival      of Indemnities**

**Section      **
**11**
**.**
**7**
**Set-Off**

----

*provided*
*however*

**Section      **
**11**
**.**
**8**
**Notices;      Effectiveness, Electronic Communications**
**.**

----

** **

----

**Section      **
**11**
**.**
**9**
**Counterparts**

**Section      **
**11**
**.**
**10**
**Successors      and Assigns**

**Section      **
**11**
**.**
**11**
**[Intentionally      Omitted]**

**Section      **
**11**
**.**
**12**
**Assignments,      Participations, Etc**
**.**

*Successors      and Assigns Generally*

*.      *

*Assignments      by Banks. *
*provided*

----

*provided,      however*

*Register.      *
*Register*

----

*Participations.      *
*Participant”*
*provided*

*provided*

*Limitations      upon Participant Rights. *

*Certain      Pledges. *
*provided*

----

*Certain      Funding Arrangements. *
*Granting      Bank”*
*SPC”*

**Section      **
**11**
**.**
**13**
**Amendments**
*provided*

*Defaulting      Bank*

----

**Section      **
**11**
**.**
**14**
**Headings**

**Section      **
**11**
**.**
**15**
**Legal      Fees, Other Costs and Indemnification**

**Section      **
**11**
**.**
**16**
**[Reserved]**
**.**

**Section      **
**11**
**.**
**17**
**Entire      Agreement**

**Section      **
**11**
**.**
**18**
**Construction**

**Section      **
**11**
**.**
**19**
**Governing      Law**

**Section      **
**11**
**.**
**20**
**SUBMISSION      TO JURISDICTION; WAIVER OF JURY TRIAL**
**THE      BORROWER HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES      DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS AND OF ANY ILLINOIS STATE      COURT SITTING IN THE CITY OF CHICAGO FOR PURPOSES OF ALL LEGAL PROCEEDINGS      ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR      THE      TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. THE BORROWER IRREVOCABLY WAIVES,      TO      THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER      HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT      AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT      IN AN INCONVENIENT FORUM. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY AND ALL      RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO      ANY      CREDIT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY.**

**Section      **
**11**
**.**
**21**
**Confidentiality**

**Section      **
**11**
**.**
**22**
**Patriot      Act**

----

**Section      **
**11**
**.**
**23**
**Rights      and Liabilities of Syndication Agent and Arrangers**

**Section      **
**11**
**.**
**24**
**No      Advisory or Fiduciary Responsibility**

*-      Remainder of Page Intentionally Left Blank; Signature Pages Follow      -*

----

| BORROWER |   | PEOPLES                  ENERGY CORPORATION,                |
|----------|--------|-------------------------------------------------------------|
|     |   | as                  Borrower                                |
|     |   |                                                        |
|     |   | By:                   /s/ D. M. Ruschau                |
|     |   | Name:                   Douglas M. Ruschau             |
|     |   | Title:                   Vice President &Treasurer |

----

| ADMINSTRATIVE                    AGENT |   | BANK                    OF AMERICA, N.A.,                                                        |
|----------------------------------------|--------|--------------------------------------------------------------------------------------------------|
|                                   |   | as                    Administrative Agent                                                       |
|                                   |   |                                                                                             |
|                                   |   | By:                     /s/ Todd MacNeill                                                   |
|                                   |   | Name:                     Todd MacNeill                                                     |
|                                   |   | Title:                     Vice President, Agency Management Officer                    III |

----

| BANKS  |   | BANK                      OF AMERICA, N.A.,             |
|--------|--------|---------------------------------------------------------|
|   |   | as a                      Bank and an Issuing Bank |
|   |   |                                                    |
|   |   | By:                       /s/ Richard D. Hill, Jr. |
|   |   | Name:                       Richard D. Hill, Jr.   |
|   |   | Title:                       Managing Director     |

----

|   |   | JPMORGAN                      CHASE BANK, N.A.,                                 |
|--------|--------|---------------------------------------------------------------------------------|
|   |   | as a                      Bank                                             |
|   |   |                                                                            |
|   |   | By:                       /s/ Gabriel Simon                                |
|   |   | Name:                       Gabriel Simon                                  |
|   |   | Title:                       Assistant Vice                      President |

----

|   |   | ABN                    AMRO BANK, N.V.,                      |
|--------|--------|--------------------------------------------------------------|
|   |   | as a                    Bank                            |
|   |   |                                                         |
|   |   | By:                     /s/ John Reed                   |
|   |   | Name:                     John Reed                     |
|   |   | Title:                     Director                     |
|   |   |                                                         |
|   |   |  By:                   /s/ M. Aamir Khan           |
|   |   |  Name:                   M. Aamir Khan             |
|   |   |  Title:                   Assistant Vice President |

----

|   |   | THE                      BANK OF TOKYO-MITSUBISHI UFJ,LTD.,                      CHICAGO BRANCH, |
|--------|--------|--------------------------------------------------------------------------------------------------|
|   |   | as a                      Bank                                                              |
|   |   |                                                                                             |
|   |   | By:                       /s/ Tsuguyuki Umene                                               |
|   |   | Name:                       Tsuguyuki Umene                                                 |
|   |   | Title:                       Deputy General Manager                                         |

----

|   |   | U.S.                    BANK NATIONAL ASSOCIATION,  |
|--------|--------|-----------------------------------------------------|
|   |   | as a                    Bank                   |
|   |   |                                                |
|   |   | By:                     /s/ R. Michael Newton  |
|   |   | Name:                     R. Michael Newton    |
|   |   | Title:  Vice                    President |

----

|   |   | CITIBANK,                    N.A.,               |
|--------|--------|--------------------------------------------------|
|   |   | as a                    Bank                |
|   |   |                                             |
|   |   | By:                     /s/ David E. Hunt   |
|   |   | Name:                     David E. Hunt     |
|   |   | Title:                     Attorney-in-Fact |

----

|   |   | MORGAN                    STANLEY BANK,                                                |
|--------|--------|---------------------------------------------------------------------------------------------|
|   |   | as a                    Bank                                                           |
|   |   |                                                                                        |
|   |   | By:                     /s/ Daniel Twenge                                              |
|   |   | Name:                     Daniel Twenge                                                |
|   |   | Title:  Vice                    President, Morgan Stanley                    Bank |

----

|   |   | THE                    NORTHERN TRUST COMPANY,      |
|--------|--------|-----------------------------------------------------|
|   |   | as a                    Bank                   |
|   |   |                                                |
|   |   | By:                     /s/ Peter Hallan       |
|   |   | Name:                     Peter Hallan         |
|   |   | Title:  Vice                    President |

----

|   |   | SUNTRUST                    BANK,                      |
|--------|--------|--------------------------------------------------------|
|   |   | as a                    Bank                      |
|   |   |                                                   |
|   |   | By:                     /s/ Kelley B. Brandenburg |
|   |   | Name:                     Kelley B. Brandenburg   |
|   |   | Title:  Vice                    President    |

----

|   |   | HARRIS                    NESBITT FINANCING, INC., |
|--------|--------|----------------------------------------------------|
|   |   | as a                    Bank                  |
|   |   |                                               |
|   |   | By:                     /s/ Ian M. Plester    |
|   |   | Name:                     Ian M. Plester      |
|   |   | Title:                     Director           |

----

|   |   | FIFTH                    THIRD BANK (CHICAGO), AMICHIGAN                    BANK CORPORATION, |
|--------|--------|-----------------------------------------------------------------------------------------------|
|   |   | as a                    Bank                                                             |
|   |   |                                                                                          |
|   |   | By:                     /s/ Kim Puszczewicz                                              |
|   |   | Name:                     Kim Puszczewicz                                                |
|   |   | Title:  Vice                    President                                           |

----

|   |   | UBS                    LOAN FINANCE LLC,           |
|--------|--------|----------------------------------------------------|
|   |   | as a                    Bank                  |
|   |   |                                               |
|   |   | By:                     /s/ Richard L. Tavrow |
|   |   | Name:                     Richard L. Tavrow   |
|   |   | Title:                     Director           |

|   |   | By:                   /s/ Irja R. Otsa      |
|--------|--------|--------------------------------------------------|
|   |   | Name:                   Irja R. Otsa        |
|   |   | Title:                   Associate Director |

----

**SCHEDULE      1.1**

**INTEREST      RATES AND FEES**

| **S                & P/ Moody's Senior** | **A/A2                or** | ***A-/A3*** | ***BBB+/*** | ***BBB/*** | **BBB-/**                     | **lower                than** |
|----------------------------------------------|----------------------------|-------------|-------------|------------|-------------------------------|-------------------------------|
| **Unsecured                Rating**          | **higher**                 | **Baa1**    | **Baa2**    | **Baa3**   | **BBB-/                Baa3** |
| **Commitment                Fee Rate**       | 6.0                        | 7.0         | 8.0         | 10.0       | 12.5                          | 20.0                          |
| **Base                Rate Margin**          | 0.0                        | 0.0         | 0.0         | 0.0        | 0.0                           | 0.0                           |
| **LIBOR                Margin**              | 25.0                       | 30.0        | 40.0        | 50.0       | 62.5                          | 87.5                          |

**      If      the Borrower is split-rated and the ratings differential is one level, the      higher rating will apply. If the Borrower is split-rated and the ratings      differential is two levels or more, the rating level one below the higher level      will apply. If at any time the Borrower has no Moody's rating or no Standard      & Poors' rating, the "Lower than BBB-/Baa3" level will apply; provided,      however, that in such event the Borrower may propose an alternative rating      agency or mechanism in replacement thereof, subject to the written consent      of      the Required Banks, such consent not to be unreasonably withheld, delayed or      conditioned.*

----

**SCHEDULE      2.1**

**REVOLVING      CREDIT COMMITMENT**

| Bank                                                                    | Revolving                CreditCommitment | Revolving                CreditCommitment                Percentage |
|-------------------------------------------------------------------------|-------------------------------------------|---------------------------------------------------------------------|
| Bank                of America, N.A.                                    | $45,000,000.00                            | 11.250000000%                                                       |
| JPMorgan                Chase Bank, N.A.                                | $45,000,000.00                            | 11.250000000%                                                       |
| ABN                AMRO Bank, N.V.                                      | $45,000,000.00                            | 11.250000000%                                                       |
| The                Bank of Tokyo - Mitsubishi UFJ, Ltd., Chicago Branch | $35,000,000.00                            | 8.750000000%                                                        |
| U.S.                Bank National Association                           | $35,000,000.00                            | 8.750000000%                                                        |
| Citibank,                N.A.                                           | $30,000,000.00                            | 7.500000000%                                                        |
| Morgan                Stanley Bank                                      | $30,000,000.00                            | 7.500000000%                                                        |
| The                Northern Trust Company                               | $30,000,000.00                            | 7.500000000%                                                        |
| SunTrust                Bank                                            | $30,000,000.00                            | 7.500000000%                                                        |
| Harris                Nesbitt Financing, Inc.                           | $25,000,000.00                            | 6.250000000%                                                        |
| Fifth                Third Bank (Chicago), A Michigan Bank Corporation  | $25,000,000.00                            | 6.250000000%                                                        |
| UBS                Loan Finance LLC                                     | $25,000,000.00                            | 6.250000000%                                                        |
| Total                                                                   | $400,000,000.00                           | 100.000000000%                                                      |

----

**SCHEDULE      11.8**

**NOTICES**

----

----

**SCHEDULE      11.12**

**PROCESSING      AND RECORDATION FEES**

| Transaction                                                   | Assignment                Fee |
|---------------------------------------------------------------|-------------------------------|
|                                                          |                          |
| First                four concurrent assignments or           | -0-                           |
| suballocations                to members of an Assignee Group |                          |
| (or                from members of an Assignee Group, as      |                          |
| applicable)                                                   |                          |
| Each                additional concurrent assignment or       | $500                          |
| suballocation                to a member of such Assignee     |                          |
| Group                (or from a member of such Assignee       |                          |
| Group,                as applicable)                          |                          |

----

**EXHIBIT      2.10**

**FORM      OF NOTE**

*"Borrower"),      *
*"Bank")      *

*prima      facie *

*"Credit      Agreement"), *

----

|   | **PEOPLES                ENERGY CORPORATION**         |
|--------|-------------------------------------------------------|
|   |                                                  |
|   | By:                ________________________________   |
|   |                                                  |
|   | Name:                ______________________________   |
|   |                                                  |
|   | Title:                _______________________________ |

----

**EXHIBIT      6.1**

**FORM      OF OPINION**

**I.      **
**Documents      Reviewed**

----

**II.      **
**Assumptions      Underlying Our Opinions**

----

**III.      **
**Our      Opinions**

*et      seq., *

**IV.      **
**Exclusions**

----

**V.      **
**Qualifications      and Limitations**

----

----

----

**VI.      **
**Reliance      on Opinions**

|   | Very                truly yours,          |
|--------|-------------------------------------------|
|   |                                      |
|   |                                      |
|   |                                      |
|   | UNGARETTI                & HARRIS LLP |

----

----

**EXHIBIT      7.3**

**FORM      OF COMPLIANCE CERTIFICATE**

*"Credit      Agreement") *

----

**SCHEDULE      1 TO COMPLIANCE CERTIFICATE**

**CALCULATION      AS OF __________ ___, 200__**

| A.     | Capital                Ratio (Sec. 7.6) |                                                                                                             |          |   |
|--------|-----------------------------------------|------------------------------------------------------------------------------------------------------------------|---------------|--------|
|   | 1.                                      | Consolidated                Indebtedness                                                                         | $____________ |   |
|   | 2.                                      | Consolidated                Net Worth (excluding accumulated other comprehensive income and                loss) | $____________ |   |
|   | 3.                                      | Sum                of Line A1 plus Line A2                                                                       | $____________ |   |
|   | 4.                                      | Capital                Ratio                                                                                     | ____          | :1.00  | (ratio                of (a) Line A1 |
|   |                                    |                                                                                                             |          |   | to                (b) Line A3 not to |
|   |                                    |                                                                                                             |          |   | exceed                0.65 to 1.00) |

----

**EXHIBIT      11.12**

**FORM      OF ASSIGNMENT AND ASSUMPTION**

**[Insert      name of Assignor]**
**[Insert      name of Assignee]**

|   | 1. | Assignor:                _____________________________ |
|--------|----|--------------------------------------------------------|

|   | 2. | Assignee:                _____________________________ |
|--------|----|--------------------------------------------------------|

|   |   | **[and                is an Affilliate/Approved Fund of [identify Bank]****1****]** |
|--------|--------|-------------------------------------------------------------------------------------|

|   | 3. | Borrower:                Peoples Energy Corporation |
|--------|----|-----------------------------------------------------|

|   | 4. | Administrative                Agent: Bank of America, N.A., as the administrative agent under the                Credit                Agreement |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 5. | Credit                Agreement: The Credit Agreement dated as of ________ ___, 2006, by                and                among Peoples Energy Corporation, the Banks party thereto, Bank of                America, N.A., as Administrative Agent, and JPMorgan Chase Bank,                N.A., as                Syndication Agent. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 6. | Assigned                Interest: |
|--------|----|-----------------------------------|

----

|         |         | Aggregate                     | Amount                of   | Percentage                 |   |
|--------------|--------------|-------------------------------|----------------------------|----------------------------|--------|
|         |         | Amount                of      | Commitment/                | Assigned                of |   |
|         |         | Commitment/                   | Loans                      | Commitment/                | CUSIP  |
| Assignor[s]2 | Assignee[s]3 | Loans                         | Assigned                   | Loans5                     | Number |
|         |         | for                all Banks4 |                       |                       |   |
|         |         | $                _________    | $                _________ | __________%                |   |
|         |         | $                _________    | $                _________ | __________%                |   |
|         |         | $                _________    | $                _________ | __________%                |   |

|   | **[7.** | **Trade                Date: ________________]****6** |
|--------|---------|-------------------------------------------------------|

**[TO      BE INSERTED BY ADMINISTRATIVE AGENT**

**AND      WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER      IN**

**THE      REGISTER THEREFOR.]**

|   | ASSIGNOR                                      |
|--------|-----------------------------------------------|
|   | [NAME                OF ASSIGNOR]             |
|   |                                          |
|   | By:                __________________________ |
|   | Title:                                        |
|   |                                          |
|   | ASSIGNEE                                      |
|   | [NAME                OF ASSIGNEE]             |
|   |                                          |
|   | By:                __________________________ |
|   | Title:                                        |

----

----

**ANNEX      1 to Assignment and Assumption**

**STANDARD      TERMS AND CONDITIONS FOR**

**ASSIGNMENT      AND ASSUMPTION**

----