DPUC Approves Connecticut Natural Gas, Southern Connecticut Gas and Office of Consumer Counsel Settlement Agreement.

Agreement results in $8 million in rate reductions for customers

Bridgeport, CT, February 22, 2002 - The Connecticut Department of Public Utility Control (DPUC) today approved a Settlement Agreement that includes rate reductions totaling $8 million for customers of Connecticut Natural Gas Corporation (CNG) and The Southern Connecticut Gas Company (SCG) over a four-year period. Starting in March 2002, CNG customers will begin seeing, as a line item on their monthly bills, credits totaling $2 million over a four year period; while SCG's customers will see credits totaling $6 million over the next four years.

This year, the full amount of $1.5 million for SCG customers and $500,000 for CNG customers will be credited during the months of March and April 2002. In the three subsequent years, the credits will be allocated during the months of November through March.

Overall, the Settlement Agreement resolves five open dockets, two court cases and provides benefits to CNG and SCG customers totaling millions of dollars.

The benefits are part of a Settlement Agreement forged between the Connecticut Office of Consumer Counsel (OCC), CNG and SCG, and endorsed by the Prosecutorial Division of the DPUC. In addition to the $8 million in rate reduction if earnings exceed the companies' allowed Return on Equity (ROE) customers will benefit by sharing a greater portion of the companies' earnings.

"We are pleased that the Settlement Agreement has been approved by the Connecticut Department of Public Utility Control," said James P. Laurito, CNG and SCG's President and Chief Operating Officer. "The Settlement Agreement could not have been reached without the hard work and dedication of members of the Prosecutorial Division of DPUC and our state's Office of Consumer Counsel. They should be commended for bringing closure to these complicated issues."

The Settlement Agreement also enables SCG to recover $13.4 million in deferred gas costs through the Purchased Gas Adjustment mechanism over a four-year period rather than in a 11 months, which will stabilize customers' bills. SCG agreed not to seek recovery of an additional $8 million in gas costs that were incurred last winter.

"The Settlement Agreement offers benefits to all parties. We at CNG and SCG will focus on continuing to provide efficient customer service and growing our gas business," added Mr. Laurito.

Editor's Note: Connecticut Natural Gas Corporation and The Southern Connecticut Gas provide natural gas energy to more than 350,000 customers in 44 Connecticut municipalities. The Companies are subsidiaries of Energy East Corporation [NYSE:EAS], a super-regional energy services and delivery company in the Northeast. Energy East is a leader in promoting competition and is committed to profitably growing its energy infrastructure. Energy East serves 2 million customers (1.4 million electricity and 600,000 natural gas) in upstate New York and New England.

Contact:
Robert Brennan
Director, Public Affairs
Connecticut Natural Gas/Southern Conn. Gas
(203) 795-7739
rbrennan@soconngas.com