Exhibit 4



                                
                     North Shore Gas Company
                               to
              U.S. Bank Trust National Association,
 as successor trustee to Continental Bank, National Association
                             Trustee
                       ___________________
                           Thirteenth
                     Supplemental Indenture
                       ___________________
                  Dated as of December 1, 1998
                       ___________________
                   Supplementing the Indenture
                    Dated as of April 1, 1955
                               and
                     Creating First Mortgage
                      5.0% Bonds, Series M
     


                                        This instrument was
prepared by and
Mail Subsequent Tax Bills to:           when recorded return to:

Peter H. Kauffman, Secretary            R. William Hunter
Peoples Energy Corporation              Chapman and Cutler
130 East Randolph Drive                 111 West Monroe Street
Chicago, Illinois  60601                Chicago, Illinois  60603

     


     Thirteenth Supplemental Indenture, dated as of the  1st  day
of  December,  1998, by and between North Shore  Gas  Company,  a
corporation duly organized on October 7, 1963, and existing under
and  by  virtue of the laws of the State of Illinois (hereinafter
sometimes  called  the "Company") and U.S.  Bank  Trust  National
Association,  as successor trustee to Continental Bank,  National
Association,   a  national  banking  association  organized   and
existing  under  the  laws of the United States  of  America  and
having  its office and place of business in the City of  Chicago,
Illinois (hereinafter sometimes called the "Trustee"),
                                
                           Witnesseth:
     
     Whereas, North Shore Gas Company (hereinafter called  "North
Shore")  heretofore  executed and delivered to  the  Trustee  its
Indenture (hereinafter called the "Original Indenture"), dated as
of  April 1, 1955, whereby North Shore granted, bargained,  sold,
transferred,   assigned,   pledged,  mortgaged,   warranted   and
conveyed,  unto the Trustee and to its successors in said  trust,
all  property, real, personal and mixed, then owned or thereafter
acquired  by it (other than property expressly excepted from  the
lien  thereof) to be held by said Trustee in trust in  accordance
with  the  provisions  of the Original Indenture  for  the  equal
proportionate benefit and security of all bonds issued and to  be
issued thereunder in accordance with the provisions thereof,  and
said Original Indenture provided for the issuance of a series  of
bonds designated "First Mortgage 3 1/2% Bonds, Series A"; and
     
     Whereas,  North Shore has heretofore executed and  delivered
to  the  Trustee its First Supplemental Indenture,  dated  as  of
July  1,  1957,  providing for the issuance  under  the  Original
Indenture of a series of bonds designated "First Mortgage 4  3/4%
Bonds, Series B" and its Second Supplemental Indenture, dated  as
of  December  1,  1961,  providing for  the  issuance  under  the
Original  Indenture  of  a  series  of  bonds  designated  "First
Mortgage 5% Bonds, Series C"; and
     
     Whereas,  Lake Gas Company, having acquired on December  20,
1963, the name of North Shore Gas Company (hereinafter called the
"Company")  and,  subject to the lien of the Original  Indenture,
all  of  its  property then subject to said lien, thereafter,  in
accordance  with  the provisions of Article XIV of  the  Original
Indenture,  executed  and delivered to the Trustee  an  indenture
entitled "Third Supplemental Indenture," dated as of December 20,
1963, whereby, among other things, the Company assumed and agreed
to  pay the principal and interest of all bonds issued or  to  be
issued  under the Original Indenture and secured thereby, and  to
perform and fulfill all of the terms, covenants and conditions of
the  Original Indenture binding upon North Shore, and in  and  by
said  Third Supplemental Indenture the Company subjected  to  the
lien  of  the  Original Indenture, subject to the exclusions  and
exceptions set forth in said Third Supplemental Indenture, all of
the property then owned by the Company or thereafter acquired  by
it (other than property of a character which is excluded from the
lien  of the Original Indenture), all as more fully set forth  in
said  Third Supplemental Indenture; and by virtue of all  of  the
things  done as in this paragraph recited, the Company has become
the successor corporation under the Original Indenture subject to
all  of  the terms, conditions and restrictions thereof, and,  in
accordance with the provisions of Section 2 of Article XIV of the
Original Indenture, may issue bonds under the Original Indenture;
and
     
     Whereas,  the Company has heretofore executed and  delivered
to  the  Trustee its Fourth Supplemental Indenture  dated  as  of
May  1,  1964, amending and supplementing the Original Indenture,
and  the  First and Second Supplemental Indentures and  providing
for  the  issuance under the Original Indenture of  a  series  of
bonds designated "First Mortgage 4.8% Bonds, Series D"; and
     
     Whereas,  the Company has heretofore executed and  delivered
to  the  Trustee  its Fifth Supplemental Indenture  dated  as  of
February   1,  1970,  amending  and  supplementing  the  Original
Indenture  and  providing  for the issuance  under  the  Original
Indenture of a series of bonds designated "First Mortgage 9  1/2%
Bonds, Series E"; and
     
     Whereas,  the Company has heretofore executed and  delivered
to  the  Trustee  its Sixth Supplemental Indenture  dated  as  of
October  1,  1973,  supplementing  the  Original  Indenture   and
providing  for  the issuance under the Original  Indenture  of  a
series   of  bonds  designated  "First  Mortgage  8  3/8%  Bonds,
Series F"; and
     
     Whereas,  the Company has heretofore executed and  delivered
to  the  Trustee its Seventh Supplemental Indenture dated  as  of
February  15,  1977,  supplementing the  Original  Indenture  and
providing  for  the issuance under the Original  Indenture  of  a
series   of  bonds  designated  "First  Mortgage  8  3/8%  Bonds,
Series G"; and
     
     Whereas,  the Company has heretofore executed and  delivered
to  the  Trustee its Eighth Supplemental Indenture  dated  as  of
September  15,  1980,  supplementing the Original  Indenture  and
providing  for  the issuance under the Original  Indenture  of  a
series of bonds designated "First Mortgage 12% Bonds, Series  H";
and
     
     Whereas,  the Company has heretofore executed and  delivered
to  the  Trustee  its Ninth Supplemental Indenture  dated  as  of
December   1,  1987,  amending  and  supplementing  the  original
Indenture  and  providing  for the issuance  under  the  Original
Indenture of a series of bonds designated "First Mortgage  10.20%
Bonds, Series I"; and
     
     Whereas,  the Company has heretofore executed and  delivered
to  the  Trustee  its Tenth Supplemental Indenture  dated  as  of
November  1,  1990,  supplementing  the  Original  Indenture  and
providing  for  the issuance under the Original  Indenture  of  a
series of bonds designated "First Mortgage Adjustable-Rate Bonds,
Series J"; and
     
     Whereas,  the Company has heretofore executed and  delivered
to  the Trustee its Eleventh Supplemental Indenture dated  as  of
October  1,  1992,  supplementing  the  Original  Indenture   and
providing  for  the issuance under the Original  Indenture  of  a
series   of  bonds  designated  "First  Mortgage  6  3/8%  Bonds,
Series K"; and
     
     Whereas,  the Company has heretofore executed and  delivered
to  the  Trustee its Twelfth Supplemental Indenture dated  as  of
April 1, 1993, supplementing the Original Indenture and providing
for  the  issuance under the Original Indenture of  a  series  of
bonds  designated  "First Mortgage Bonds, Series  L  Medium  Term
Notes"; and
     
     Whereas,  it  is  provided  in the  Original  Indenture,  as
amended   and   supplemented   by  the   aforesaid   supplemental
indentures,   (said  Original  Indenture,  as  so   amended   and
supplemented,  collectively  referred  to  hereinafter   as   the
"Indenture"), that bonds of any series may from time to  time  be
issued thereunder by the Company in an aggregate principal amount
equal  to  66 2/3% of the amount of net expenditures for unfunded
bondable property as defined in the Indenture; and
     
     Whereas,  the  Company  has duly  determined  to  create  an
additional  series of its bonds to be issued under the Indenture,
as   supplemented  by  this  Thirteenth  Supplemental  Indenture,
designated  "First  Mortgage 5.0% Bonds, Series  M"  (hereinafter
sometimes  referred to as "bonds of Series M"), and to  issue  an
aggregate of $30,035,000 principal amount of said bonds,  all  of
which  shall  contain such provisions as are set  forth  in  this
Thirteenth Supplemental Indenture; and
     
     Whereas,  the  Illinois Development Finance  Authority  will
issue $30,035,000 in aggregate principal amount of its Gas Supply
Revenue  Bonds  (North Shore Gas Company Project),  Series  1998,
which  will  be  collateralized by an equal  aggregate  principal
amount of bonds of Series M, and lend the proceeds to the Company
for  the  purpose of financing the construction  of  certain  gas
distribution  and transmission facilities within  Lake  and  Cook
Counties, Illinois; and
     
     Whereas,  the  Company  desires in and  by  this  Thirteenth
Supplemental Indenture to set forth the description  of,  confirm
unto  the  Trustee and give further assurance to it with  respect
to,  certain property heretofore acquired by the Company and  now
subject   to  the  lien  of  the  Indenture  but  not  heretofore
specifically described herein; and
     
     Whereas,  the form of registered bond of Series  M  and  the
form  of  the  Trustee's Certificate to appear on  all  bonds  of
Series M shall be substantially as follows:
                                
       (Form of Series M Registered Bond without Coupons)

No. R ___                                             $__________
                                
                     North Shore Gas Company
               First Mortgage ____% Bond, Series M
                      Due December 1, 2028
     
     North   Shore   Gas   Company,   an   Illinois   corporation
(hereinafter  called the "Company"), for value  received,  hereby
promises to pay to___________________________ ___________________
or registered assigns, the principal sum of ____________________
Dollars  on  the first day of December, 2028 and to  pay  to  the
registered  owner interest on said sum from the date  hereof,  at
the  rate  of 5.0% per annum, until said principal sum  is  paid.
Interest   to  the  maturity  of  this  bond  will   be   payable
semi-annually  on  the first day of June and  the  first  day  of
December  in  each  year, the first interest payment  date  being
June  1,  1999.  The interest so payable on any interest  payment
date (June 1 or December 1, as the case may be) will, so long  as
there  is  no  existing default in the payment  of  interest  and
except  for  the payment of defaulted interest, be  paid  to  the
person  in  whose name this bond is registered at  the  close  of
business on the respective May 15 or November 15, as the case may
be,  next  preceding  such  interest payment  date  (the  "Record
Date"), or, if such day is not a Business Day (as defined in  the
Indenture),  then  the  Business Day  next  preceding  such  day.
Defaulted interest shall be paid to the person in whose name this
bond  is  registered  at the close of business  on  a  subsequent
Record Date, which shall not be less than five (5) days prior  to
the  date  of payment of such defaulted interest, established  by
notice given by mail by or on behalf of the Company to the person
in whose name this bond is then registered and to the Trustee, as
hereinafter  defined, not less than ten (10) days preceding  such
subsequent Record Date.  The principal of, premium, if  any,  and
the  interest  on the bonds of Series M shall be payable  at  the
principal corporate office of the Company in the City of Chicago,
State  of Illinois, in any coin or currency of the United  States
of  America  which  at the time of payment is  legal  tender  for
public and private debts.
     
     This  bond is continued on the reverse side hereof  and  the
additional  provisions therein set forth shall for  all  purposes
have the same effect as if set forth at this place.
                                
                      ____________________
     
     This  bond is one of the bonds issued and to be issued  from
time to time under and in accordance with and all secured by  the
Indenture dated as of April 1, 1955, as supplemented and  amended
by  Supplemental Indentures dated as of July 1, 1957, December 1,
1961,   December  20,  1963,  May  1,  1964,  February  1,  1970,
October   1,  1973,  February  15,  1977,  September  15,   1980,
December  1,  1987, November 1, 1990, October 1, 1992,  April  1,
1993, and December 1, 1998 respectively (collectively referred to
herein as the "Indenture"), executed and delivered by the Company
to  U.S. Bank Trust National Association, as successor trustee to
Continental   Bank,  National  Association,   as   Trustee   (the
"Trustee").   Reference to the Indenture is  hereby  made  for  a
description  of the property mortgaged and pledged  (except  that
certain  property  described in the Indenture has  been  released
from  the  lien of the Indenture pursuant to the terms  thereof),
the  nature  and  extent of the security and the  rights  of  the
holders  and  registered owners of said bonds and of the  Trustee
and of the Company in respect of such security.  By the terms  of
the  Indenture, the bonds to be secured thereby are  issuable  in
series which may vary as to date, amount, date of maturity,  rate
of  interest,  redemption provisions, medium of  payment  and  in
other respects as in the Indenture provided.
     
     At  the  option of the Company, the bonds of  Series  M  are
redeemable upon the notice and in the manner and with the  effect
provided in the Indenture, in whole at any time or in part on any
interest  payment date, beginning on December  1,  2005,  at  the
redemption  prices  (expressed as percentages  of  the  principal
amount  thereof) set forth below, plus accrued interest  thereon,
if any, to the date of redemption:
 
                                                    Redemption
     Redemption Dates (Inclusive)                     Prices
 
     December 1, 2005 through November 30, 2006            102%
     December 1, 2006 through November 30, 2007            101%
     December 1, 2007 and thereafter                       100%
     
     The bonds of Series M are subject to mandatory redemption in
whole,  upon  the  notice and on the manner and with  the  effect
provided in the Indenture, at a redemption price equal to 100% of
the  principal amount thereof, plus accrued interest, if any,  to
the redemption date in the event that all or substantially all of
the  mortgaged property shall be sold or taken by  the  power  of
eminent domain or otherwise.
     
     The bonds of Series M are subject to mandatory redemption at
100%  of the principal amount thereof, plus accrued interest,  if
any,  to  the  redemption date, in whole (or in part as  provided
below) on any day within one hundred and twenty (120) days  after
the  Company receives written notice from a registered  owner  or
former  registered  owner  of the Gas Supply  Revenue  Bonds  (as
defined in the Indenture) or the Revenue Bond Trustee (as defined
in  the  Indenture)  of  a final determination  by  the  Internal
Revenue Service or a court of competent jurisdiction that,  as  a
result  of  a  failure  by the Company  to  perform  any  of  its
agreements in the Loan Agreement (as defined in the Indenture) or
the  inaccuracy  of  any  of  its  representations  in  the  Loan
Agreement  or any certificate submitted pursuant to  the  Revenue
Bond  Indenture (as defined in the Indenture), the interest  paid
or  to  be  paid  on  any Gas Supply Revenue Bond  (except  to  a
"substantial  user" of the project or a "related  person"  within
the  meaning  of  Section 147(a) of the Code (as defined  in  the
Indenture)  is  or  was includible in the  gross  income  of  the
registered  owner or former registered owner for  federal  income
tax  purposes.   For purposes of this paragraph, the  "registered
owner" of a Gas Supply Revenue Bond includes the beneficial owner
(i.e.,  the  actual purchaser as recorded on the records  of  the
Direct  and  Indirect Participants (as defined in the Indenture))
of  such  Bond.   No such determination will be considered  final
unless  the registered owner or former registered owner  involved
in  the determination gives the Company, the Revenue Bond Trustee
and  the Trustee prompt written notice of the commencement of the
proceedings  resulting  in  the  determination  and  offers   the
Company, subject to the Company's agreeing to pay all expenses of
the  proceeding and to indemnify the registered owner  or  former
registered  owner against all liabilities that might result  from
it, the opportunity to control the defense of the proceeding, and
either the Company does not agree within thirty (30) days to  pay
the expenses, indemnify the registered owner or former registered
owner  and control the defense or the Company exhausts or chooses
not  to  exhaust available procedures to contest or obtain review
of  the  result of the proceedings.  Fewer than all the bonds  of
Series  M may be redeemed in the manner provided in the Indenture
if  the  redemption of fewer than all of the Gas  Supply  Revenue
Bonds  would  result in the interest payable on  the  Gas  Supply
Revenue  Bonds  remaining outstanding being  not  includible  for
federal  income  tax purposes in the gross income  of  any  owner
other than a "substantial user" or "related person."
     
     All  of  the outstanding bonds of Series M shall be redeemed
by  the  Company as soon as practicable, but not more than  sixty
(60)  days,  after the Trustee receives written notice  from  the
Revenue Bond Trustee stating that the principal on the Gas Supply
Revenue Bonds has been declared to be immediately due and payable
as  a  result  of  an  event of default under  the  Revenue  Bond
Indenture.  The redemption price for any such redemption shall be
100%  of the principal amount of the bonds of Series M so  to  be
redeemed, plus accrued interest, if any, to the redemption date.
     
     On  December 1 of each year commencing December 1, 2000, the
Company  will be required to redeem, upon notice from the Revenue
Bond  Trustee, up to $25,000 in principal amount of the bonds  of
Series M per registered owner of a Gas Supply Revenue Bond,  upon
the  death  of  any registered owner, following  receipt  by  the
Revenue  Bond Trustee of a request therefor from such  registered
owner's  personal  representative or surviving  joint  tenant(s).
The Company will not be required to redeem more than $600,000  in
aggregate principal amount of bonds of Series M pursuant to  such
redemptions in any twelve-month period.  The redemption price for
any  such redemption shall be 100% of the principal amount of the
bonds  of  Series M so to be redeemed, plus accrued interest,  if
any, to the redemption date.
     
     The  death of a person who, during his or her lifetime,  was
entitled  to  substantially  all of the  beneficial  interest  of
ownership  of a Gas Supply Revenue Bond will be deemed the  death
of  a  registered owner, regardless of the registered  owner,  if
such  beneficial interest can be established to the  satisfaction
of  the Revenue Bond Trustee.  Such beneficial interest shall  be
deemed  to  exist  in  typical cases of street  name  or  nominee
ownership,  ownership  under the Uniform  Gifts  to  Minors  Act,
community property or other joint ownership arrangements  between
the  husband  and wife, and trust and certain other  arrangements
where   one  person  has  substantially  all  of  the  beneficial
ownership interest in the Gas Supply Revenue Bond during  his  or
her lifetime.  In the case of Gas Supply Revenue Bonds registered
in  the name of banks, trust companies or broker-dealers who  are
members  of  a  national  securities  exchange  or  the  National
Association    of    Securities   Dealers,    Inc.    ("Qualified
Institutions"), the redemption limitations described above  apply
to  each beneficial owner of Gas Supply Revenue Bonds held by any
Qualified Institution.  In connection with a redemption  request,
such Qualified Institution must submit evidence, satisfactory  to
the  Revenue  Bond Trustee, that it holds the Gas Supply  Revenue
Bonds  subject to request on behalf of such beneficial owner  and
must certify the aggregate amount of redemption requests made  on
behalf of such beneficial owner.
     
     Except as is otherwise provided in the Indenture, notice  of
any  redemption of bonds of Series M shall be given  by  mailing,
postage  prepaid,  at least thirty (30) days and  not  more  than
sixty  (60) days prior to the redemption date, to the holders  of
all  such bonds to be redeemed at their last addresses that shall
appear upon the registry book, all as more fully provided in  the
Indenture.   Notice  of redemption having been  duly  given,  the
bonds called for redemption shall become due and payable upon the
redemption  date  and, if the redemption price  shall  have  been
deposited  with  the  Trustee, interest thereon  shall  cease  to
accrue  on  or  after  the  redemption  date,  and  whenever  the
redemption  price  thereof shall have  been  deposited  with  the
Trustee  and notice of redemption shall have been duly  given  or
provision  therefor made, such bonds shall no longer be  entitled
to any lien or benefit of the Indenture.
     
     In  case  of  certain  events of default  specified  in  the
Indenture, the principal of bonds of Series M may be declared  or
may  become  due  and payable in the manner and with  the  effect
provided  in  the Indenture.  No recourse shall be  had  for  the
payment of the principal of or interest on this bond, or for  any
claim  based hereon, or otherwise in respect hereof,  or  of  the
Indenture,  to or against any incorporator, shareholder,  officer
or  director, past, present or future, of the Company, or of  any
predecessor or successor corporation, either directly or  through
the  Company, or such predecessor or successor corporation, under
any constitution or statute or rule of law, or by the enforcement
of any assessment or penalty, or otherwise, all such liability of
incorporators, shareholders, directors and officers being  waived
and released by the registered owner hereof by the acceptance  of
this bond and being likewise waived and released by the terms  of
the Indenture.  This bond is transferable by the registered owner
hereof,  in person or by attorney duly authorized, at the  office
or  place of business of the Trustee under the Indenture upon the
surrender  and  cancellation of this  bond  and,  upon  any  such
transfer, a new registered bond or bonds, without coupons, of the
same  series  and  maturity  date  and  for  the  same  aggregate
principal  amount  will be issued to the transferee  in  exchange
herefor.
     
     This  bond shall not be valid or become obligatory  for  any
purpose unless and until it shall have been authenticated by  the
execution  by  the Trustee or its successor in  trust  under  the
Indenture of the certificate endorsed hereon.
     
     In  Witness Whereof, the Company has caused this bond to  be
executed  in  its name by its President, or one of its  Executive
Vice Presidents or Vice Presidents, manually or in facsimile, and
its  corporate  seal  to  be impressed or  imprinted  hereon  and
attested  by  its Secretary or one of its Assistant  Secretaries,
manually or in facsimile.

Dated:

                                  North Shore Gas Company


                                  By:__________________________
                                             President
Attest:

_____________________
    Secretary

                                
                 (Form of Trustee's Certificate)
     
     This  bond  is  one  of the bonds of the  series  designated
therein,  referred  to  and described  in  the  within  mentioned
Indenture.

                                  U.S. Bank Trust National
                                Association, as successor
                                trustee to Continental Bank,
                                National Association, as
                                Trustee,


                                  By: ___________________________
                                        Authorized Officer
     
     and
     
     Whereas, all acts and things necessary to make the bonds  of
Series M, when authenticated by the Trustee and issued as in  the
Indenture and in this Thirteenth Supplemental Indenture provided,
the  valid, binding and legal obligations of the Company entitled
in  all respects to the security of the Indenture have been  done
and  performed, and the creation, execution and delivery of  this
Thirteenth Supplemental Indenture have in all respects been  duly
authorized;
     
     Now,   Therefore,  This  Thirteenth  Supplemental  Indenture
Witnesseth, that, in order further to secure the payment  of  the
principal  of  and interest on all bonds at any time  issued  and
outstanding under the Indenture according to their tenor, purport
and  effect, and to secure the performance and observance of  all
the  covenants  and  conditions  therein  and  in  the  Indenture
contained and for and in consideration of the premises and of the
mutual  covenants  herein  contained  and  of  the  purchase  and
acceptance  of the bonds of Series M by the holders thereof,  and
of the sum of $1.00 duly paid to the Company by the Trustee at or
before  the ensealing and delivery hereof, and for other valuable
considerations,  the receipt whereof is hereby acknowledged,  the
Company  has  executed and delivered this Thirteenth Supplemental
Indenture,  and  by  these presents does  grant,  bargain,  sell,
release, convey, assign, transfer, mortgage, pledge, set over and
confirm and warrant unto the Trustee, the properties (other  than
properties  of  the character embraced within the  definition  of
excepted  property  as  set  forth in the  Indenture)  which  are
described  in  Exhibit  A  which is  annexed  hereto  and  hereby
expressly made a part hereof;
     
     To  Have  and  to Hold all of said properties  and  all  and
singular  the lands, properties, estates, rights, franchises  and
privileges  hereby mortgaged, conveyed, pledged or  assigned,  or
intended  so  to  be,  by  the  Indenture,  and  this  Thirteenth
Supplemental Indenture, together with all appurtenances thereunto
appertaining,  unto  the Trustee and its successors  and  assigns
forever;
     
     Subject,  however, to permitted encumbrances and  liens  (as
defined in the Indenture) and to the exceptions set forth in  the
granting  and pledging clauses of the Indenture, and, as  to  any
property hereafter acquired by the Company, to any liens  thereon
existing,  and to any liens for unpaid portions of  the  purchase
price placed thereon at the time of such acquisition, but only to
the extent that such liens are permitted by the Indenture.
     
     In  Trust,  Nevertheless, upon the terms and trusts  in  the
Indenture  and  in  this  Thirteenth Supplemental  Indenture  set
forth, for the equal and proportionate use, benefit, security and
protection  of those who from time to time shall hold  the  bonds
and  coupons authenticated and delivered under the Indenture  and
as  supplemented by this Thirteenth Supplemental Indenture and as
may  hereafter  be  further amended and  supplemented,  and  duly
issued by the Company, without any discrimination, preference  or
priority  of  any  bond or coupon over any  other  by  reason  of
priority  in  time  of  issue, sale  or  negotiation  thereof  or
otherwise, except as provided in the Indenture, so that,  subject
to  said provisions, each and all of said bonds and coupons shall
have  the same right, lien and privilege under the Indenture  and
any  indenture supplemental thereto and shall be equally  secured
thereby   (except  as  any  sinking,  amortization,  improvement,
renewal  or  other  fund,  established  in  accordance  with  the
provisions   of  the  Indenture  or  any  indenture  supplemental
thereto,  may  afford additional security for the  bonds  of  any
particular series), and in trust for enforcing the payment of the
principal  of the bonds and of the interest thereon according  to
the tenor, purport and effect of the bonds and coupons and of the
Indenture and for enforcing the terms, provisions, covenants  and
stipulations   in   the  Indenture,  and   in   this   Thirteenth
Supplemental Indenture and in the bonds set forth.
     
     Upon  Condition  that, until the happening of  an  Event  of
Default  (as defined in Section 1 of Article X of the Indenture),
the  Company shall be suffered and permitted to possess, use  and
enjoy  said  properties, except as limited in respect  of  money,
securities and other personal property pledged or deposited  with
or  required to be pledged or deposited with the Trustee, and  to
receive and use the rents, issues, income, revenues, earnings and
profits therefrom.
                                
                            Article I
                                
                        Bonds of Series M

Section 1.01. There is hereby created and authorized a series  of
bonds  limited  to the aggregate principal amount of  $30,035,000
designated  First Mortgage 5.0% Bonds, Series M, due December  1,
2028.   All  bonds of Series M shall be registered bonds  without
coupons and shall be dated as provided in Section 1 of Article II
of  the Indenture and so long as there is no existing default  in
the  payment of interest upon the bonds of Series M, any bond  of
Series  M issued after the close of business on any Record  Date,
as hereinafter defined, with respect to any interest payment date
(June  1  or  December 1, as the case may be) and prior  to  such
interest payment date shall be dated as of such interest  payment
date;  provided,  however, that if and to  the  extent  that  the
Company  shall  default in the payment of interest  due  on  such
interest payment date, then any such bond of Series M shall  bear
interest from the June 1 or December 1, as the case may be, being
the interest payment date for bonds of Series M to which interest
has  previously  been paid or made available for payment  on  the
outstanding bonds of said series, or if the Company shall default
in the payment of interest on the first interest payment date for
bonds of Series M, then from the date of the commencement of  the
first interest period of such bonds of Series M, which date shall
be  June  1,  1999.   Except  as aforesaid  and  subject  to  the
following  sentence,  all bonds of Series M shall  bear  interest
from   their  date  at  the  rate  of  5.0%  per  annum,  payable
semi-annually  on June 1 and December 1 in each year,  the  first
interest  payment date being June 1, 1999, and  shall  mature  on
December 1, 2028.
     
     So  long  as there is no existing default in the payment  of
interest  on the bonds of Series M, the interest payable  on  any
interest  payment date shall be paid to the person in whose  name
any  bond  of Series M is registered at the close of business  on
the  Record Date with respect to such interest payment date,  and
such person shall be entitled to receive the interest payable  on
such  interest  payment date notwithstanding the cancellation  of
any  such  bond  of  Series  M on any  exchange  or  transfer  of
registration thereof subsequent to the Record Date and  prior  to
such  interest  payment date, except as and  to  the  extent  the
Company  shall  default in the payment of interest  due  on  such
interest  payment  date, in which event such  defaulted  interest
shall  be paid to the person in whose name each bond of Series  M
is  registered  on  the close of business on a subsequent  Record
Date,  which  shall not be less than five (5) days prior  to  the
date of payment of such defaulted interest, established by notice
given  by  mail by or on behalf of the Company to the persons  in
whose  names  such bonds of Series M are registered  and  to  the
Trustee  not  less than ten (10) days preceding  such  subsequent
Record Date.
     
     The  principal of, premium, if any, and the interest on  the
bonds  of  Series  M shall be payable at the principal  corporate
office  of the Company in the City of Chicago, State of Illinois,
in  any coin or currency of the United States of America which at
the time of payment is legal tender for public and private debts.
     
     As  used in this Section 1.01, the term "Business Day" means
any  day  which  is  not a Sunday or a legal  holiday  or  a  day
(including  Saturday) on which banking institutions in  the  city
where  the  principal corporate trust office of  the  Trustee  is
located  are authorized by law or executive order to  close  (and
the Trustee is in fact closed).
     
     As  used in this Section 1.01, the term "Record Date" means,
with respect to any interest payment date (June 1, or December 1,
as  the  case may be), the fifteenth day of May or the  fifteenth
day of November, as the case may be, next preceding such interest
payment  date, or, if such fifteenth day of May or fifteenth  day
of  November  is  not  a  Business Day,  the  Business  Day  next
preceding  such  fifteenth  day of  April  or  fifteenth  day  of
October,  or  with respect to the payment of defaulted  interest,
the date established by the Company as hereinabove provided.
     
     As  used  in  this  Section 1.01, the term "default  in  the
payment  of  interest"  means failure  to  pay  interest  on  the
applicable interest payment date disregarding any period of grace
permitted by the Indenture, as amended and supplemented.

      Section 1.02.  A.  At the option of the Company, the  bonds
of  Series  M  shall  be  redeemable in  the  manner  hereinafter
provided, in whole at any time or in part on any interest payment
date,  beginning  December  1, 2005,  at  the  redemption  prices
(expressed  as percentages of the principal amount  thereof)  set
forth  below, plus accrued interest thereon, if any, to the  date
of redemption:
                                                    Redemption
     Redemption Dates (Inclusive)                     Prices
 
     December 1, 2005 through November 30, 2006            102%
     December 1, 2006 through November 30, 2007            101%
     December 1, 2007 and thereafter                       100%

    B.  The bonds of Series M are subject to mandatory redemption
at  100%  of the principal amount thereof, plus accrued interest,
if  any,  to the redemption date in whole (or in part as provided
below) on any day within one hundred and twenty (120) days  after
the  Company receives written notice from a registered  owner  or
former  registered owner of the Gas Supply Revenue Bonds  or  the
Revenue  Bond  Trustee of a final determination by  the  Internal
Revenue Service or a court of competent jurisdiction that,  as  a
result  of  a  failure  by the Company  to  perform  any  of  its
agreements in the Loan Agreement or the inaccuracy of any of  its
representations   in  the  Loan  Agreement  or  any   certificate
submitted  pursuant to the Revenue Bond Indenture,  the  interest
paid  or to be paid on any Gas Supply Revenue Bond (except  to  a
"substantial  user" of the project or a "related  person"  within
the  meaning of Section 147(a) of the Code) is or was  includible
in  the gross income of the registered owner or former registered
owner  for  federal income tax purposes.  For  purposes  of  this
paragraph,  the "registered owner" of a Gas Supply  Revenue  Bond
includes  the  beneficial owner (i.e., the  actual  purchaser  as
recorded  on the records of the Direct and Indirect Participants)
of  such Gas Supply Revenue Bond.  No such determination will  be
considered final unless the registered owner or former registered
owner  involved  in  the  determination gives  the  Company,  the
Revenue Bond Trustee and the Trustee prompt written notice of the
commencement  of  the proceedings resulting in the  determination
and  offers the Company, subject to the Company's agreeing to pay
all  expenses  of the proceeding and to indemnify the  registered
owner  or  former  registered owner against all liabilities  that
might  result from it, the opportunity to control the defense  of
the  proceeding, and either the Company does not agree within  30
days  to  pay  the  expenses, indemnify the registered  owner  or
former  registered owner and control the defense or  the  Company
exhausts  or  chooses  not  to exhaust  available  procedures  to
contest or obtain review of the result of the proceedings.  Fewer
than  all the bonds of Series M may be redeemed if redemption  of
fewer  than all of the Gas Supply Revenue Bonds would  result  in
the  interest  payable on the Gas Supply Revenue Bonds  remaining
outstanding being not includible for federal income tax  purposes
in  the  gross  income  of  any registered  owner  other  than  a
"substantial user" or "related person." If this redemption occurs
in  accordance with the terms of this Section 1.02.B, the failure
by  the  Company  to perform any of its agreements  in  the  Loan
Agreement or inaccuracy of any of its representations in the Loan
Agreement  or any certificate submitted pursuant to the Indenture
shall  not in and of itself constitute an event of default  under
the  Indenture,  the  Thirteenth Supplemental  Indenture  or  the
Revenue Bond Indenture.  Any such redemption shall be at a  price
equal to 100% of the principal amount of the bonds of Series M so
to  be redeemed, plus accrued interest, if any, to the redemption
date.

    C.  The bonds of Series M are subject to mandatory redemption
in  whole, upon the notice and in the manner and with the  effect
provided in the Indenture, at a redemption price equal to 100% of
the  principal amount thereof, plus accrued interest, if any,  to
the redemption date in the event that all or substantially all of
the  mortgaged property shall be sold or taken by  the  power  of
eminent domain or otherwise.

     D.   All  of  the  outstanding bonds of Series  M  shall  be
redeemed by the Company as soon as practicable, but not more than
sixty  (60) days, after the Trustee receives written notice  from
the  Revenue Bond Trustee stating that the principal on  the  Gas
Supply Revenue Bonds has been declared to be immediately due  and
payable as a result of an event of default under the Revenue Bond
Indenture.  The redemption price for any such redemption shall be
100%  of the principal amount of the bonds of Series M so  to  be
redeemed, plus accrued interest, if any, to the redemption date.

     E.   On December 1 of each year commencing December 1, 2000,
the  Company  will be required to redeem, upon  notice  from  the
Revenue  Bond Trustee, up to $25,000 in principal amount  of  the
bonds  of  Series M per registered owner of a Gas Supply  Revenue
Bond,  upon the death of any registered owner, following  receipt
by  the  Revenue  Bond Trustee of a request  therefor  from  such
registered  owner's  personal representative or  surviving  joint
tenant(s).  The Company will not be required to redeem more  than
$600,000  in  aggregate principal amount of  bonds  of  Series  M
pursuant  to  such redemptions in any twelve-month  period.   The
bonds of Series M subject to redemption as described above may be
presented  for  redemption by delivering to  the  Trustee  (i)  a
written  request for redemption from the Revenue Bond Trustee  in
form  satisfactory  to the Trustee, and (ii) the  bond(s)  to  be
redeemed.  Any such redemption shall be at a price equal to  100%
of  the  principal  amount of the bonds so to be  redeemed,  plus
accrued interest to the redemption date.
     
     The  death of a person who, during his or her lifetime,  was
entitled  to  substantially  all of the  beneficial  interest  of
ownership  of a Gas Supply Revenue Bond will be deemed the  death
of  a  registered owner, regardless of the registered  owner,  if
such  beneficial interest can be established to the  satisfaction
of  the Revenue Bond Trustee.  Such beneficial interest shall  be
deemed  to  exist  in  typical cases of street  name  or  nominee
ownership,  ownership under the Uniform Transfers to Minors  Act,
community property or other joint ownership arrangements  between
the  husband  and wife, and trust and certain other  arrangements
where   one  person  has  substantially  all  of  the  beneficial
ownership interest in the Gas Supply Revenue Bond during  his  or
her lifetime.  In the case of Gas Supply Revenue Bonds registered
in  the name of banks, trust companies or broker-dealers who  are
members  of  a  national  securities  exchange  or  the  National
Association    of    Securities   Dealers,    Inc.    ("Qualified
Institutions"), the redemption limitations described above  apply
to  each beneficial owner of Gas Supply Revenue Bonds held by any
Qualified   Institution.   In  connection  with  the   redemption
request,   such  Qualified  Institutions  must  submit  evidence,
satisfactory to the Revenue Bond Trustee, that it holds  the  Gas
Supply  Revenue  Bonds  subject to  request  on  behalf  of  such
beneficial  owner  and  must  certify  the  aggregate  amount  of
redemption requests made on behalf of such beneficial owner.
     
     Requests  for  redemption in excess of $25,000 per  deceased
holder  in  a  period may be honored by the Company in  its  sole
discretion.  If the Company honors such a request, the amount  by
which  the redemption exceeds the $25,000 limitation will not  be
included in the computation of the aggregate $600,000 limitation.
     
     Any  redemption requests not honored because of the $600,000
aggregate  limitation  will be carried over  into  the  next  and
succeeding periods.

     F.   Bonds  of Series M shall be redeemable upon the  notice
provided for in Section 1.03 of this Article I.

Section  1.03. The provisions of Section 2 of Article VI  of  the
Indenture  shall  not be applicable to the  bonds  of  Series  M.
Otherwise,  the  provisions of Article VI of the Indenture  shall
apply   to  any  redemption  of  the  bonds  of  Series  M  under
Section 1.02 hereof.

Section  1.04. Upon the execution and delivery of this Thirteenth
Supplemental  Indenture and upon compliance with  the  applicable
provisions  of the Indenture, as supplemented by this  Thirteenth
Supplemental Indenture, the Company shall execute and deliver  to
the Trustee and the Trustee shall authenticate and deliver to  or
upon  the  written order of the President, or an  Executive  Vice
President or a Vice President of the Company, bonds of  Series  M
in  an  aggregate principal amount of $30,035,000.  All bonds  of
Series M shall be executed on behalf of the Company by the manual
or  facsimile  signature of its President, or an  Executive  Vice
President  or  a Vice President of the Company and its  corporate
seal  shall  be  impressed  or  imprinted  and  attested  by  its
Secretary  or  one of its Assistant Secretaries, manually  or  in
facsimile,  and be authenticated by the manual execution  by  the
Trustee of the certificate endorsed on said bonds of Series M.

Section  1.05. Bonds of Series M shall bear the following legend:
"This  Bond may not be sold, transferred, pledged or hypothecated
except  as  required  to effect assignment to  the  Revenue  Bond
Trustee and to any successor trustee."

Section 1.06. In this Supplemental Indenture, the following terms
shall  have  the meanings specified in this Section 1.06,  unless
the context otherwise requires:
     
     "Loan  Agreement" means the Loan Agreement executed  by  and
between the IDFA and the Company dated as of December 1, 1998, as
from time to time amended and supplemented.
     
     "Direct Participant" means any broker-dealer, bank or  other
financial  institution  for which DTC holds  Gas  Supply  Revenue
Bonds from time to time as a securities depository.
     
     "DTC"  means  The  Depository  Trust  Company,  a  New  York
corporation, and its successors and assigns.
     
     "Gas  Supply  Revenue Bonds" means the  Gas  Supply  Revenue
Bonds  (North Shore Gas Company Project), Series 1998, issued  by
the IDFA in the aggregate principal amount of $30,035,000.
     
     "IDFA" means the Illinois Development Finance Authority.
     
     "Indirect Participant" means any person on behalf of whom  a
Direct  Participant holds an interest in the Gas  Supply  Revenue
Bonds.
     
     "Code"  means the Internal Revenue Code of 1986, as amended,
and all regulations promulgated thereunder.
     
     "Opinion of Tax Counsel" means a written opinion of  counsel
who  is acceptable to the Revenue Bond Trustee, which counsel may
be  an  employee  of  or counsel to the IDFA,  the  Revenue  Bond
Trustee or the Company, and which counsel shall be experienced in
matters  relating to the tax exemption of interest on obligations
issued   by   states   and  their  political   subdivisions   and
instrumentalities thereof.
     
     "Person"  means  any  individual, corporation,  partnership,
joint   venture,   joint-stock  company,  trust,   unincorporated
organization or government or any agency or political subdivision
thereof.
     
     "Project"  means the land, structures, machinery, equipment,
systems or processes, or any portion thereof, which are described
in  Exhibit A to the Loan Agreement, as said Exhibit A  may  from
time to time be amended.
     
     "Revenue  Bond  Indenture" means that certain  Indenture  of
Trust  executed  by  and between the IDFA and  the  Revenue  Bond
Trustee,  dated  as  of November 1, 1998, and any  amendments  or
supplements thereto.
     
     "Revenue  Bond  Trustee" means The First  National  Bank  of
Chicago, and any successor trustee appointed pursuant to  Section
8.08 or 8.09 of the Revenue Bond Indenture at the time serving as
successor  trustee  thereunder and shall include  any  co-trustee
serving as such thereunder.

Section 1.07. The Company reserves the right, without any consent
or  other  action  by holders of the bonds of Series  M,  or  any
subsequent  series of bonds, to amend the Indenture by  inserting
the  following  language as Section 4 of Article XVI  immediately
following current Section 3 of Article XVI of the Indenture:
            
            "Section  4.  Anything in Section 1  of  this
       Article XVI to the contrary notwithstanding,  with
       the  consent of the holders and registered  owners
       of  not  less  than  sixty  per  centum  (60%)  in
       aggregate  principal amount of all the bonds  then
       outstanding (determined as provided in  Section  2
       of  Article  XVII  of  this  Indenture)  or  their
       attorneys-in-fact  duly  authorized,  or,  if  the
       rights of the holders of one or more, but not all,
       series  then outstanding are affected, the consent
       of  the holders and registered owners of not  less
       than sixty per centum (60%) in aggregate principal
       amount   of   all   the  bonds  then   outstanding
       (determined   as   provided  in   Section   2   of
       Article  XVII  of this Indenture) of all  affected
       series,  taken together, and of any other  series,
       the  Company, when authorized by resolution of its
       Board  of Directors, and the Trustee from time  to
       time  and at any time, subject to the restrictions
       in  this  Indenture contained, may enter  into  an
       indenture  or indentures supplemental  hereto  for
       the  purpose  of  adding  any  provisions  to   or
       changing in any manner or eliminating any  of  the
       provisions   of   this   Indenture   or   of   any
       supplemental indenture or modifying the rights and
       obligations of the Company and the rights  of  the
       holders of any of the bonds and coupons; provided,
       however, that no such supplemental indenture shall
       (1)  extend  the maturity of any of the  bonds  or
       reduce  the rate or extend the time of payment  of
       interest  thereon,  or reduce the  amount  of  the
       principal  thereof, or reduce any premium  payable
       on  the  redemption thereof or change the coin  or
       currency in which any bond or interest thereon  is
       payable,  without  the consent of  the  holder  or
       registered  owner  of each bond  so  affected,  or
       (2) permit the creation of any lien, not otherwise
       permitted, prior to or on a parity with  the  lien
       of  the  Indenture,  without the  consent  of  the
       holders  and  registered owners of all  the  bonds
       then  outstanding,  or  (3) reduce  the  aforesaid
       percentage  of the aggregate principal  amount  of
       bonds  the holders and registered owners of  which
       are  required  to  approve any  such  supplemental
       indenture,  without the consent of the holders  of
       all  the bonds then outstanding.  For the purposes
       of  this  Section 4, bonds shall be deemed  to  be
       affected  by a supplemental indenture if,  in  the
       opinion   of   the   Trustee,  such   supplemental
       indenture  would adversely affect or diminish  the
       rights  of holders thereof against the Company  or
       against its property.
            
            Upon  the  written request  of  the  Company,
       accompanied  by  a  resolution  of  its  Board  of
       Directors  authorizing the execution of  any  such
       supplemental indenture, and upon the  filing  with
       the   Trustee  of  evidence  of  the  consent   of
       bondholders   as  aforesaid  (the  instrument   or
       instruments  evidencing such consent to  be  dated
       within  one  year  of such request),  the  Trustee
       shall  join  with the Company in the execution  of
       such    supplemental   indenture    unless    such
       supplemental  indenture affects the Trustee's  own
       rights,  duties or immunities under this Indenture
       or otherwise, in which case the Trustee may in its
       discretion, but shall not be obligated  to,  enter
       into  such  supplemental indenture.   The  Trustee
       shall  be  entitled  to receive  and,  subject  to
       Section 1 of Article XV hereof, may rely upon,  an
       opinion of counsel as conclusive evidence that any
       such  supplemental  indenture  is  authorized   or
       permitted by the provisions of this Section 4.
            
            It  shall not be necessary for the consent of
       the  bondholders under this Section to approve the
       particular   form  of  any  proposed  supplemental
       indenture,  but  it  shall be sufficient  if  such
       consent shall approve the substance thereof.
            
            The  Company  and  the Trustee,  if  they  so
       elect,  and  either before or after  such  60%  or
       greater consent has been obtained, may require the
       holder  or registered owner of any bond consenting
       to   the   execution  of  any  such   supplemental
       indenture to submit his bond to the Trustee or  to
       such  bank,  banker  or trust company  as  may  be
       designated by the Trustee for the purpose, for the
       notation  thereon of the fact that the  holder  or
       registered owner of such bond has consented to the
       execution of such supplemental indenture,  and  in
       such  case such notation, in form satisfactory  to
       the  Trustee,  shall be made  upon  all  bonds  so
       submitted,  and such bonds bearing  such  notation
       shall   forthwith  be  returned  to  the   persons
       entitled  thereto.   All  subsequent  holders  and
       registered  owners of bonds bearing such  notation
       shall be deemed to have consented to the execution
       of  such supplemental indenture, and consent, once
       given or deemed to be given, may not be withdrawn.
            
            Prior to the execution by the Company and the
       Trustee of any supplemental indenture pursuant  to
       the  provisions  of this Section  4,  the  Company
       shall  publish a notice, setting forth in  general
       terms   the   substance   of   such   supplemental
       indenture, at least once in one daily newspaper of
       general  circulation in each  city  in  which  the
       principal  of any of the bonds shall  be  payable,
       or,  if  all bonds outstanding shall be registered
       bonds  without coupons or coupon bonds  registered
       as to principal, such notice shall be sufficiently
       given if mailed, first class, postage prepaid, and
       registered  if  the  Company so  elects,  to  each
       registered holder of bonds at the last address  of
       such  holder appearing on the registry books, such
       publication or mailing, as the case may be, to  be
       made  not less than thirty (30) days prior to such
       execution.   Any  failure of the Company  to  give
       such  notice,  or any defect therein,  shall  not,
       however,  in any way impair or affect the validity
       of any such supplemental indenture."
                                
                           Article II
                                
                      Additional Covenants

Section 2.01. The Company covenants that, so long as any bonds of
Series  M  are  outstanding, the Company  will  comply  with  and
observe   the  covenants,  terms  and  provisions  contained   in
Section 10 of Article IV of the Indenture which covenants,  terms
and  provisions  shall  remain in effect and  shall  be  for  the
benefit  of the holders of the bonds of Series M as well  as  the
bonds of Series J, the bonds of Series K, and the bonds of Series
L.

Section  2.02. So long as any bonds of Series M are  outstanding,
the  Company  will not declare or pay any dividends  (other  than
dividends  payable  solely  in its  common  stock)  or  make  any
distribution  of  any  kind  on,  or  make  any  expenditures  to
purchase,  redeem  or retire (other than by  exchange  for  other
shares,  or  through the application of the net cash proceeds  of
the sale of other shares, exchanged or sold after the date of the
initial  issuance of any bonds of Series M), any  shares  of  its
common stock if:
     
         (a)   after giving effect to the dividend, distribution,
     or  expenditure  concerned,  the  aggregate  amount  thereof
     (except  to the extent hereinbefore in this section excepted
     from  the  effect hereof) shall be in excess of the  sum  of
     $500,000  plus  (or,  in the event such accumulated  surplus
     earnings  shall  be  a negative amount, minus)  the  surplus
     earnings  of  the  Company, determined  in  accordance  with
     generally   accepted   accounting  principles,   accumulated
     subsequent to September 30, 1980; or
     
         (b)   any event of default hereunder shall then exist or
     thereby occur or an event shall have occurred or a situation
     shall  then exist which by lapse of time alone would  become
     an event of default hereunder.
     
     "Surplus  earnings" for purposes of this Section 2.02  shall
be  deemed  to mean net earnings, as defined in paragraph  12  of
Article  I of the Indenture, less all applicable interest charges
and  less all taxes on income not deducted in computing said  net
earnings.

Section  2.03. The term "default" or "event of default"  wherever
used in this Thirteenth Supplemental Indenture shall mean any one
or more of the events set forth in Article X of the Indenture.
                                
                           Article III
                                
                          Miscellaneous

Section  3.01.  For all purposes of this Thirteenth  Supplemental
Indenture,  all  terms  herein contained  shall,  except  as  the
context  may  otherwise require or as provided herein,  have  the
meanings given to such terms in the Indenture.

Section   3.02.   The  recitals  contained  in  this   Thirteenth
Supplemental  Indenture are made by the Company and  not  by  the
Trustee; and all of the provisions contained in the Indenture  in
respect of the rights, privileges, immunities, powers and  duties
of the Trustee shall be applicable in respect hereof as fully and
with like effect as set forth herein in full.

Section   3.03.  This Thirteenth Supplemental  Indenture  may  be
executed  in  any  number  of  counterparts  and  each  of   such
counterparts shall for all purposes be deemed to be  an  original
and shall constitute but one and the same instrument.
     
     In  Witness  Whereof, the Company has caused this instrument
to  be  executed  in its corporate name by its President,  or  an
Executive  Vice President or a Vice President and  its  corporate
seal  to  be hereunto affixed and to be attested by its Secretary
or  an  Assistant  Secretary, and said U.S. Bank  Trust  National
Association,  as successor trustee to Continental Bank,  National
Association,  to  evidence its acceptance  of  its  trust  hereby
created,  has  caused  this instrument  to  be  executed  in  its
corporate name by an Executive Vice President or one of its  Vice
Presidents and its corporate seal to be hereunto affixed  and  to
be  attested  by an Assistant Secretary, in several counterparts,
all as of the day and year first above written.


                                  North Shore Gas Company



                                  By: /s/ James M. Luebbers
                                          ______________________
                                          Vice President

Attest:

/s/ Peter Kauffman
__________________
Secretary
                                
                                
                                U.S. Bank Trust National
                                  Association, as successor
                                  trustee to Continental Bank,
                                  National Association


                                  By: /s/ Frank Sgaraglino
                                          _____________________
                                          Vice President

Attest:

/s/ B. W. Lord
________________
Assistant Secretary




State of Illinois   )
                    ) SS.
County of Cook      )
     
     
     I,  Gloria A. Rodriguez  , a Notary public  in  and
for  said County, in the State aforesaid, Do Hereby Certify  that
J.  M. Luebbers    and    P. Kauffman   , personally known to  me
to  be  the  same  persons  whose names  are  subscribed  to  the
foregoing instrument, and personally known to me to be  the  duly
qualified  and acting Vice President and Secretary, respectively,
of  North  Shore  Gas Company, appeared before  me  this  day  in
person,  and acknowledged that they signed, sealed and  delivered
the said instrument as their free and voluntary acts as such Vice
President  and  Secretary, respectively,  and  as  the  free  and
voluntary act of said North Shore Gas Company, for the  uses  and
purposes therein set forth.
     
     In  Witness  Whereof, I have hereunto set my hand  and  have
affixed my Notarial Seal this    17    day of December, 1998.
                                
                                
                  
                                /s/ Gloria A. Rodriguez
                                    _________________
                                    Notary Public

My commission expires    May 16   ,  2001 .




State of Illinois   )
                    ) SS.
County of Cook      )
     
     
     I,     Remonia Jamison   , a Notary public in and  for  said
County, in the State aforesaid, Do Hereby Certify that      Frank
Sgaraglino     and      B. W. Lord     , personally known  to  me
to  be  the  same  persons  whose names  are  subscribed  to  the
foregoing instrument, and personally known to me to be  the  duly
elected,  qualified  and  acting  Vice  President  and  Assistant
Secretary, respectively, of U.S. Bank Trust National Association,
as  successor  trustee to Continental Bank, National Association,
appeared before me this day in person, and acknowledged that they
signed,  sealed and delivered the said instrument as  their  free
and   voluntary  acts  as  such  Vice  President  and   Assistant
Secretary,  respectively, and as the free and  voluntary  act  of
said  U.S. Bank Trust National Association, as successor  trustee
to  Continental  Bank, National Association,  for  the  uses  and
purposes therein set forth.
     
     In  Witness  Whereof, I have hereunto set my hand  and  have
affixed my Notarial Seal this    16    day of December, 1998.
                                
                                
                                
                                 /s/ Remonia Jamison
                                     _________________
                                     Notary Public

My commission expires    December 2   ,  2000 .




                            Exhibit A
     
     1.    All  rights  of way, easements, franchises,  licenses,
permit,   privileges,  leases,  Leaseholds  and  other  authority
granted   to   the  Company  for  the  purpose  of  constructing,
installing, operating, using, maintaining, renewing, replacing or
relocating  gas  mains, pipelines, services and other  facilities
on,  over or in private property owned by others and situated  in
the  Counties  of  Cook  and  Lake  in  the  State  of  Illinois,
including,  without  limiting the generality  of  the  foregoing,
those  certain easements granted to the Company by  the  grantors
hereinafter   named  and  filed  for  record  and   recorded   as
hereinafter set forth to wit.

     
     
                            NSG Easements                     EXHIBIT A
                                                               12/11/98
<TABLE>
<CAPTION>
                                                            EXHIBIT A

     All rights of way, easements, franchises, licenses, permit, privileges, 
leases, leaseholds and other authority granted to the Company for the purpose 
of constructing, installing, operating, using, maintaining, renewing, replacing 
or relocating gas mains, pipelines, services and other facilities on, over or 
in private property owned by others and situated in the Counties of Cook and 
Lake in the State of Illinois, including without limiting the generality of 
the foregoing, those certain easements granted to the Company by the grantors
hereinafter named and filed for record and recorded as hereinafter set forth 
to wit.




          

  <C>                              <C>                    <S>   <C>     <S>                              <C>           <S>
 
Grantor                            PIN Number                  Common Address                      Document Number   County
LaSalle National Trust, N.A. 
  (Trustee)                        04-04-101-029,030,032  Downey's Cook County Home Addition             94869886      Cook
LaSalle State Real Estate Trust    04-02-101-021-0000     One Northbrook Place, Northbrook, IL           95377760      Cook
Commonwealth Edision Company                              Lake-Cook Road & Metra                         04022436      Cook
Potomac Corp.                      03-23-202-018          100 W. Willow Road, Wheeling, IL               93664650      Cook
Village of Wheeling                03-23-202-019          100 W. Willow Road, Wheeling, IL               93713364      Cook
Allstate Insurance Company         03-23-401-012          1600 S. Wolf Road, Wheeling, IL                93664651      Cook
E-Z POR, Division of 
 Packaging Corp. of America        03-23-202-025          1500 S. Wolf Road, Wheeling, IL                93664649      Cook
Independent Trust Corp. (Trustee)  03-21-203-005          40555 Goldenrod Lane, Wadsworth, IL            3447779       Lake
Factory Outlet Mall Associates     08-21-423-008          20 South Utica Street, Waukegan, IL            Not Recorded  Lake
Chicago Title and Trust (Trustee)  04-18-208-001 & 002    Westside Hills Subdivision, Zion, IL           3486660       Lake
American National Bank and Trust 
  Co. of Waukegan (Trustee)                               Willow Woods Condo, Beach Park, IL             3437343       Lake
John Matthew Mauser and John 
  Michael Mauser                   03-04-300-034          43216 N. Country Lane, Zion, IL                3486657       Lake
Russell E. Lasco, Jr.              02-01-400-008          19047 W. Stateline Road, Antioch, IL           3407352       Lake
Bank of Waukegan (Trustee)         08-19-100-041          3130-3170 Monroe Street, Waukegan, IL          3495245       Lake
Frank A. Bonora and Marjorie 
  Bonora                           04-08-100-030          42674 Kenosha Road, Zion, IL                   3450313       Lake
Harold A., Jean A., Sue J., 
   and Sandra M. Damrow            02-01-400-010          19241 W. Stateline Road, Antioch, IL           3411493       Lake
Dewayne R. Bookwalter and 
  Georgia W. Bookwalter            02-01-400-011          19375 W. Stateline Road, Antioch, IL           3411494       Lake
Charles V. & Joeseph F. Dugo, 
  Margaret Ray and Mary Leone      12-18-400-20 & 21      12295-12355 W. Quassey Avenue, Lake Bluff, IL  3495244       Lake
Dewayne R. Bookwalter and 
   Marsha Bookwalter               02-01-400-012          19375 W. Stateline Road, Antioch, IL           3411491       Lake
Donald Behlke and Patricia J. 
   Behlke                          02-01-300-011          19505 W. Stateline Road, Antioch, IL           3407353       Lake
Commonwealth Edision Company                              Lorelei Drive, Zion, IL                        Not Recorded  Lake
Joseph and Barbara Dooper          03-04-300-001          16975 W. Stateline Road, Zion, IL              3323710       Lake
Robert G Shaw                      06-01-100-003          Carmen Court, Lindenhurst, IL                  3311303       Lake
Buffalo Grove Park District        15-34-117-027          Candlewood Creek East Subdivision              Not Recorded  Lake
Bank of Waukegan (Trustee)         03-35-301-004          38355 Chicago Avenue, Wadsworth, IL            3346467       Lake
Albany Bank and Trust Company 
 (Trustee)                         16-15-308-003 thru 007 980-988 Half Day Road, Highland Park, IL       3362510       Lake
Joseph and Barbara Dooper          03-04-400-001          43460 N. Skokie Hwy., Zion, IL                 3323705       Lake
Joseph and Barbara Dooper          03-04-300-011          16527 W. Stateline Road, Zion, IL              3233705       Lake
Joseph and Barbara Dooper          03-04-300-036          16575 W. Stateline Road, Zion, IL              3323706       Lake
Joseph and Barbara Dooper          03-04-300-036          West Stateline Road, Zion, IL                  3323707       Lake
Daniel J. Burke and Abbe L. 
 Burke                             02-01-400-005          19145 W. Stateline Road, Antioch, IL           3437345       Lake
Joseph and Barbara Dooper          03-04-300-003          16825 W. Stateline Road, Zion, IL              3323709       Lake
Chevy Chase Business Park 
  Limited Partnership              15-35-300-178 & 179    Chevy Chase Business Park                      3559678       Lake
Joseph and Barbara Dooper          03-05-400-018          17023 W. Stateline Road, Zion, IL              3323711       Lake
Joseph and Barbara Dooper          03-04-300-005          16611 W. Stateline Road, Zion, IL              3366662       Lake
Concept 1, Inc.                    10-36-202-040 thru 046 19425 thru 19449 Forest Lane, Mundelein, IL    3371175       Lake
Robert M. Buege                    04-28-300-016          3410 Gabriel Avenue, Zion, IL                  3399672       Lake
American National Bank and 
  Trust Co. of Chicago (Trustee)   15-07-200-003          Old Grove Farm Subdivision                     3190587       Lake
American National Bank and 
  Trust Co. of Chicago (Trustee)   15-07-200-009          Old Grove Farm Subdivision                     3190587       Lake
American National Bank and 
  Trust Co. of Chicago (Trustee)   15-07-200-011          Old Grove Farm Subdivision                     3190587       Lake
American National Bank and 
  Trust Co. of Chicago (Trustee)   15-07-200-012          Old Grove Farm Subdivision                     3190587       Lake
Joseph and Barbara Dooper          03-04-300-036          16943 Stateline Road, Zion, IL                 3323708       Lake
Gerald E. and Sara D. Mahler       12-18-100-020          29820 N. Hwy. 41, Lake Bluff, IL               3964303       Lake
Grand National Bank                07-14-305-004          749 N. Milwaukee Avenue, Gurnee, IL            3783990       Lake
Deerfied State Bank (Trustee)      16-33-101-005          750 Waukegan Road, Deerfield, IL               3804766       Lake
G.B. Properties, Inc.              07-19-100-050          347512 N. Hwy. 45, Lake Villa, IL              3815510       Lake
Abbott Laboratories                11-12-400-001          Waukegan Road, Lake County, IL                 3836543       Lake
Teachers Insurance and Annuity 
   Association of America          07-25-311-001          901 Lakehurst Road, Waukegan, IL               3864879       Lake
American National Bank and Trust 
  Company of Chicago (Trustee)     08-18-324-009 & 010    Greenbay Rd. & Grand Avenue, Waukegan, IL      3864878       Lake
Mary Weil (Trustee)                03-04-300-025          16650 Russell Road, Zion, IL                   3874149       Lake
Village of Gurnee                  07-18-400-010 & 011    Almond Road at Bittersweet Drive, Gurnee, IL   3378255       Lake
LaSalle National Trust N.A. 
  (Trustee)                        11-18-105-016          801 Technology Way, Libertyville, IL           3891546       Lake
City of Lake Forest                16-07-207-001          Everett Road & Telegraph Road, Lake Forest, IL 3725697       Lake
Bank of Waukegan (Trustee)         11-16-300-022          134 Lake Street, Libertyville, IL              3954552       Lake
Vulcan Lands, Inc.                 06-35-400-027,028,020  875 S. Hwy. 83, Grayslake, IL                  4041549       Lake
                                   10-02-200-014          875 S. Hwy. 83, Grayslake, IL                  4041549       Lake
Nehi Royal Crown Corporation       07-12-101-019          2217 Delany Road, Waukegan, IL                 4098605       Lake
Ebsco Industries, Inc.             07-12-101-021          2245 Delany Road, Waukegan, IL                 4098606       Lake
Candlewood Chicago, IL- 
  Libertyville, LLC                11 -18-103-031          USG Drive, Libertyville, IL                    4104848       Lake
Fred Gust and Martin A. Gust       08-18-402-017 & 018    2869 Glen Flora, Waukegan, IL                  4180170       Lake
LaSalle National Trust N.A. 
  (Trustee)                        11-18-105-023          801 Technology Way, Libertyville, IL           3891545       Lake
Commonwealth Edision Company                              Knowles Road, Gurnee, IL                       Not Recorded  Lake
American National Bank and 
  Trust Co. of Waukegan (Trustee)                         Calmarin Gardens, Zion, IL                     3437344       Lake
American National Bank & 
  Trust Co. of Chicago (Trustee)   03-27-300-021          Wadsworth Rd. & Route 41, Wadsworth, IL        4222231       Lake
First Midwest Trust Company, 
  N.A. (Trustee)                   08-21-418-034          25 N. County Street, Waukegan, IL              3564798       Lake
Village of Gurnee                  07-18-400-011          Dada Drive                                     Not Recorded  Lake
Northern Trust Bank/Lake Forest 
  (Trustee)                        12-19-200-040          407 Skokie Highway, Lake Bluff, IL             3580025       Lake
Lake County Public Water District  04-15-200-005          500 17th Street, Zion, IL                      3572654       Lake
John K. Burgess and Judy Burgess   04-08-300-014          4625 10th Street, Zion IL                      3597543       Lake
LaSalle National Trust, N.A. 
  (Trustee)                        11-18-100-016          700 N. Hwy 45, Libertyville, IL                3715024       Lake
Commonwealth Edision Company                              Vinyard Drive, Gurnee, IL                      Not Recorded  Lake
Commonwealth Edison Company                               Route 120, Waukegan, IL                        3737692       Lake
John A. Ronan and Mary A. Ronan    07-29-404-036          33057 N. Ashley Drive, Grayslake, IL           3652239       Lake
American National Bank & Trust 
  Co. of Chicago (Trustee)         16-35-305-017          1567 County Line Road, Highland Park, IL       3652238       Lake
American National Bank & Trust 
  Co. of Chicago (Trustee)         15-01-202-046 & 051    Conway Farms Phase 1, Lake Forest, IL          3407351       Lake
American National Bank & Trust 
  Co. of Chicago (Trustee)         16-35-305-017          1567 County Line Road, Highland Park, IL       3652238       Lake
Ghasem Sariri and Sharareh         04-18-400-035 & 037    3905 Route 173, Zion, IL                       3703699       Lake
City of Lake Forest                12-32-201-008          500 E. Deerpath, Lake Forest, IL               3717929       Lake
Cole Taylor Bank (Trustee)         12-32-201-015          500 N. Golf Lane, Lake Forest, IL              3709370       Lake
Cole Taylor Bank (Trustee)         12-19-209-010          305 Waukegan Rd. Lake Bluff, IL                3311304       Lake
State of Illinois Department 
  of Conservation                                         Illinois Beach State Park                      3597544       Lake

</TABLE>