**Exhibit        12**

| **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,* |
|                                                                                                       |   | *12/31/2006* |   |   | *2006* |   |   | *2005* |   |   | *2004* |   |   | *2003* |   |   | *2002* |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  Income (Loss) Before Preferred                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                  Dividends, as reported                                                         |   | $ | 25,552 |   | $ | (17,636 | ) | $ | 78,133 |   | $ | 81,564 |   | $ | 103,934 |   | $ | 89,071 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Change                  in undistributed earnings from equity investees                               |   |   | 6,607 |   |   | 4,788 |   |   | (10,150 | ) |   | (8,327 | ) |   | 4,740 |   |   | 12,216 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Add                  - Income Taxes                                                                   |   |   | 17,852 |   |   | (16,751 | ) |   | 44,704 |   |   | 37,833 |   |   | 59,182 |   |   | 46,321 |   |
| Fixed                  charges excluding capitalized interest                                         |   |   | 66,483 |   |   | 61,583 |   |   | 50,615 |   |   | 48,426 |   |   | 49,441 |   |   | 56,439 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings                                                                                              |   | $ | 116,494 |   | $ | 31,984 |   | $ | 163,302 |   | $ | 159,496 |   | $ | 217,297 |   | $ | 204,047 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed                  charges including capitalized interest                                         |   | $ | 66,483 |   | $ | 61,583 |   | $ | 50,615 |   | $ | 48,426 |   | $ | 49,441 |   | $ | 56,439 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio                  of Earnings to Fixed Charges                                                   |   |   | 1.75 |   |   | 0.52 |   |   | 3.23 |   |   | 3.29 |   |   | 4.40 |   |   | 3.62 |   |