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 yesterday 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. Yesterday’s order puts it on a permanent basis, effectiveOct. 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 experiencea 9-10% decrease in their annual bills to bring their deliverycharge in line with the actual cost of delivering their gas. Inaddition to the rate-related provisions of the plan, otherprovisions require Niagara Mohawk to: