| **Peoples                Energy Corporation and Subsidiary Companies**                            |
|---------------------------------------------------------------------------------------------------|
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Statement                Re: Computation of Ratio of Earnings to Fixed                Charges** |
| (Dollars                in Thousands)                                                             |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                              |   |   | 12                months ended |   | *Fiscal                years ended September 30,* |
|                                                                                              |   |   | *3/31/2006* |   |   | *2005* |   |   | *2004* |   |   | *2003* |   |   | *2002* |   |   | *2001* |   |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                Income Before Preferred                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                Dividends, as reported                                                       |   | $ | 18,174 |   | $ | 78,133 |   | $ | 81,564 |   | $ | 103,934 |   | $ | 89,071 |   | $ | 96,939 |   |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Change                in undistributed earnings from equity investees                             |   |   | (8,663 | ) |   | (10,150 | ) |   | (8,327 | ) |   | 4,740 |   |   | 12,216 |   |   | (7,587 | ) |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Add                - Income Taxes                                                                 |   |   | (442 | ) |   | 44,704 |   |   | 37,833 |   |   | 59,182 |   |   | 46,321 |   |   | 51,372 |   |
| Fixed                charges excluding capitalized interest                                       |   |   | 53,666 |   |   | 50,615 |   |   | 48,426 |   |   | 49,441 |   |   | 56,439 |   |   | 72,051 |   |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings                                                                                          |   | $ | 62,735 |   | $ | 163,302 |   | $ | 159,496 |   | $ | 217,297 |   | $ | 204,047 |   | $ | 212,775 |   |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed                charges including capitalized interest                                       |   | $ | 53,666 |   | $ | 50,615 |   | $ | 48,426 |   | $ | 49,441 |   | $ | 56,439 |   | $ | 72,051 |   |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio                of Earnings to Fixed Charges                                                 |   |   | 1.17 |   |   | 3.23 |   |   | 3.29 |   |   | 4.40 |   |   | 3.62 |   |   | 2.95 |   |