| 1) | I have      reviewed this Annual Report on Form 10-K of North Shore Gas      Company; |
|----|---------------------------------------------------------------------------------------|

| 2) | Based on my      knowledge, this annual report does not contain any untrue statement of a      material fact or omit to state a material fact necessary to make the      statements made, in light of the circumstances under which such statements      were made, not misleading with respect to the period covered by this      annual report; |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3) | Based on my      knowledge, the financial statements, and other financial information      included in this annual report, fairly present in all material respects      the financial condition, results of operations and cash flows of the      registrant as of, and for, the periods presented in this annual      report; |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4) | The      registrant's other certifying officer and I are responsible for      establishing and maintaining disclosure controls and procedures (as      defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal      control over financial reporting (as defined in Exchange Act Rules      13a-15(f) and 15d-15(f)) for the registrant and  have: |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | a) | Designed such      disclosure controls and procedures, or caused such disclosure controls and      procedures to be designed under our supervision, to ensure that material      information relating to the registrant, including its consolidated      subsidiaries, is made known to us by others within those entities,      particularly during the period in which this annual report is being      prepared; |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b) | Designed such      internal control over financial reporting, or caused such internal control      over financial reporting to be designed under our supervision, to provide      reasonable assurance regarding the reliability of financial reporting and      the preparation of financial statements for external purposes in      accordance with generally accepted accounting  principles; |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c) | Evaluated the      effectiveness of the registrant's disclosure controls and procedures and      presented in this annual report our conclusions about the effectiveness of      the disclosure controls and procedures, as of the end of the period      covered by this annual report based on such evaluation;  and |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | d) | Disclosed in      this annual report any change in the registrant's internal control over      financial reporting that occurred during the registrant's most recent      fiscal quarter (the registrant's fourth fiscal quarter in the case of an      Annual Report) that has materially affected, or is reasonably likely to      materially affect, the registrant's internal control over financial      reporting; and |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5) | The      registrant's other certifying officer and I have disclosed, based on our      most recent evaluation of internal control over financial reporting, to      the registrant's auditors and the audit committee of the registrant's      board of directors (or persons performing the equivalent      functions): |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | a) | All      significant deficiencies and material weaknesses in the design or      operation of internal control over financial reporting which are      reasonably likely to adversely affect the registrant's ability to record,      process, summarize and report financial information;  and |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b) | Any fraud,      whether or not material, that involves management or other employees who      have a significant role in the registrant's internal control over      financial reporting. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Date:      February 25, 2009 | /s/ Lawrence      T. Borgard                   |
|------------------------------|------------------------------------------------|
|                         | Lawrence T.      Borgard                       |
|                         | Vice Chairman      and Chief Executive Officer |

----