| North Shore      Gas Company                                    |   |
|-----------------------------------------------------------------|--------|
| Ratio of      Earnings to Fixed Charges                         |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                            |   |   |   |   | Three-Month |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                            |   |   |   |   | Transition |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                            |   | Year      Ended |   |   | Period      Ended |   |   | Years Ended      September 30, |   |
| (Millions)                                                      |   | 12/31/2007 |   |   | 12/31/2006 |   |   | 2006 |   |   | 2005 |   |   | 2004 |   |   | 2003 |   |
| EARNINGS                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings on      common stock                                   |   | $ | 7.9 |   |   | $ | 4.4 |   |   | $ | 6.7 |   |   | $ | 11.4 |   |   | $ | 11.1 |   |   | $ | 14.6 |   |
| Federal and      state income taxes                             |   |   | 5.2 |   |   |   | 2.6 |   |   |   | 3.8 |   |   |   | 6.7 |   |   |   | 6.7 |   |   |   | 8.7 |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net pretax      income                                          |   |   | 13.1 |   |   |   | 7.0 |   |   |   | 10.5 |   |   |   | 18.1 |   |   |   | 17.8 |   |   |   | 23.3 |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed      charges                                              |   |   | 4.2 |   |   |   | 1.1 |   |   |   | 4.1 |   |   |   | 3.8 |   |   |   | 3.7 |   |   |   | 3.6 |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      earnings as defined                                  |   | $ | 17.3 |   |   | $ | 8.1 |   |   | $ | 14.6 |   |   | $ | 21.9 |   |   | $ | 21.5 |   |   | $ | 26.9 |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| FIXED      CHARGES                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest on      long-term debt, including related amortization |   | $ | 3.5 |   |   | $ | 0.9 |   |   | $ | 3.6 |   |   | $ | 3.6 |   |   | $ | 3.6 |   |   | $ | 3.4 |   |
| Other      interest                                             |   |   | 0.7 |   |   |   | 0.2 |   |   |   | 0.5 |   |   |   | 0.2 |   |   |   | 0.1 |   |   |   | 0.2 |   |
| Interest      factor applicable to rentals                      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed      charges                                              |   | $ | 4.2 |   |   | $ | 1.1 |   |   | $ | 4.1 |   |   | $ | 3.8 |   |   | $ | 3.7 |   |   | $ | 3.6 |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio of      earnings to fixed charges                         |   |   | 4.1 |   |   |   | 7.4 |   |   |   | 3.6 |   |   |   | 5.8 |   |   |   | 5.8 |   |   |   | 7.5 |   |