The New York State Public Service Commission has acted to eitherfreeze or decrease the distribution portion of charges to naturalgas customers of Niagara Mohawk Power through Aug. 31, 2003 as partof a multi-year rate and restructuring plan.

“Although the Commission and the utilities have no control overthe price of natural gas on the national or international markets,the savings for some of Niagara Mohawk’s delivery customers underthis plan should help ease the impact, somewhat, of higher naturalgas prices this winter,” Commission Chairman Maureen O. Helmersaid.

The Commission’s order last week permanently implements arestructuring plan aimed at encouraging more competition in thecompany’s service region, making it easier for its customers toshop for natural gas suppliers. Provisions of the rate plan hadbeen approved in July and implemented on a temporary basis inAugust. The order puts it on a permanent basis, effective Oct. 28.

The “commodity” portion of bills will continue to reflectcompetitive market prices for natural gas in the United States andCanada.

Many residents and small businesses in Niagara Mohawk’s serviceregion already purchase their gas supplies from competitors, andhave experienced decreases in the delivery charge portion of theirbills from the utility as a result of the Commission’s approval ofthe plan in July. About 22,170 of these customers will experience a9-10% decrease in their annual bills to bring their delivery chargein line with the actual cost of delivering their gas. In additionto the rate-related provisions of the plan, other provisionsrequire Niagara Mohawk to:

_ More clearly delineate on bills the actual costs of itsvarious gas services to allow customers to more easily comparisonshop for new competitive suppliers;

_ Provide grants to counties in its service territory to developgas “aggregation” programs for low-income customers;

_ Undertake a consumer education program employing a variety ofapproaches to inform consumers about their ability to purchase gasfrom nonutility, competitive suppliers;

_ Implement advanced-technology maintenance programs to extendthe useful life of its underground distribution mains; and;

_ Meet specified customer service quality and gas safety andreliability targets or pay financial penalties in the form ofcredits to customers if it does not do so.

Niagara Mohawk Power Corporation serves approximately 545,600natural gas customers in a wide upstate service region that extendsfrom the state’s borders with Canada and Pennsylvania to its borderwith New England and north throughout the Adirondack Region.

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