Cascade Natural Gas 8-K Fiscal Year 2004 Second Quarter and Year-to-date Earnings

Exhibit 99.1

CASCADE NATURAL GAS CORPORATION ANNOUNCES

FISCAL YEAR 2004 SECOND QUARTER AND YEAR-TO-DATE EARNINGS

	For Immediate Release
Contact:	J. D. Wessling
	Cascade Natural Gas Corporation
	206/624-3900

April 19, 2004 [Seattle] — Cascade Natural Gas Corporation (NYSE: CGC) reported earnings of $8.5 million or $0.76 per share for the fiscal second quarter ended March 31, 2004, a 25% improvement over the $6.8 million or $0.62 per share for the second quarter ended March 31, 2003. Earnings were positively affected by cost controls and higher residential and commercial per-customer consumption. A fiscal year 2003 second quarter charge of $865,000 for claims arising out of the termination of gas supply contracts adversely burdened the earlier period. Earnings for the six-month period were $16.4 million or $1.47 per share, compared to $13.5 million or $1.22 per share for the six months ended March 31, 2003.

****

Second Quarter Results

Total operating margins (revenue minus gas costs and revenue taxes) were up $2.5 million over the quarter ended March 31, 2003.

•Residential and commercial operating margin increased $2.7 million in the most recent quarter. Higher per-customer consumption attributable, in large part, to 10% colder temperatures accounted for $1.7 million of the increase. The addition of 9,014 more residential and commercial customers, a 4.3% growth rate, added $907,000.

•Distribution service margins from electric generation customers were down for the quarter $596,000 or 24%. The decline can be attributed to the slow economy dampening the demand for electricity.

•Operating margin from distribution services for industrial customers other than electric generators improved by $250,000.  Margin from gas management services and other was down by $620,000 (before a fiscal year 2003 contract termination charge of $865,000) due primarily to a decrease in gas sales margins and a decrease in the number of customers served from 61 to 40.

Cost of Operations (operating expense, depreciation and amortization, and property and miscellaneous taxes) was  $131,000 lower than in the quarter last year. Operating expense for the quarter was lower by $176,000. The major contributing factor was a reduction of benefits expense resulting from plan changes implemented in July of 2003.

Year-to-Date Results

Year-to-date operating margin was up $3.7 million over the fiscal 2003 six-month period. Residential and commercial margin contributed to the increase, with $2.3 million due to 6.3% higher per-customer consumption levels and $1.7 million due to the addition of customers. A $427,000 increase in industrial distribution margin and a $475,000 favorable mark-to-market valuation for a swap and cap supporting fixed price natural gas sales to a group of industrial customers was offset by decreased revenue from electric generation customers, gas management services, and other.

On a year-to-date basis, total cost of operations was lower than fiscal 2003 by $790,000. The favorable result stems from benefit expense savings partially offset by increases in labor expense, depreciation, and miscellaneous expense.

Capital Expenditures

Second quarter net capital expenditures were $9.7 million and for the six months expenditures were $19.9 million out of a total budget for the fiscal year of $35.0 million. The major expenditure continues to be the automated meter-reading project started in July of 2003. This year $6.8 million has been expended installing the new features on customer meters, and project-to-date expenditures have been $10.4 million of a total project budget of $16 million. It is expected the project will be completed during the quarter ending December 31, 2004.

Year-to-date results are on track to meet earlier released earnings expectations of $1.35 to $1.40 for full fiscal year 2004.

The Company previously announced its declaration of a $0.24 per share quarterly dividend on common stock, payable May 14, 2004 to shareholders of record at the close of business April 30, 2004.

Cascade Natural Gas Corporation is a local distribution company providing natural gas service to approximately 215,000 customers in the states of Washington and Oregon.

Statements contained in this report that are not historical in nature are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual future results to differ materially. Such risks and uncertainties with respect to the Company include, among others, its ability to successfully implement internal performance goals, competition from alternative forms of energy, consolidation in the energy industry, the failure or inability of key natural gas suppliers to honor their commitments, the capital-intensive nature of the Company’s business, regulatory issues, including the need for adequate and timely rate relief to recover increased capital and operating costs resulting from customer growth and to sustain dividend levels, the weather, increasing competition brought on by deregulation initiatives at the federal and state regulatory levels, the potential loss of large volume industrial customers due to “bypass” or the shift by such customers to special competitive contracts at lower per unit margins, exposure to environmental cleanup requirements, and economic conditions, particularly in the Company’s service area.

Cascade Natural Gas Corporation

Financial Highlights -(Thousands, except per share amounts)

Second Quarter Fiscal 2004

	Fiscal Year 2004													Fiscal Year 2003
											Year															Year			Year
	Three Months Ended										to			Three Months Ended												Ended			to Date
	Dec 31			Mar 31			Jun 30		Sep 30		Date			Dec 31			Mar 31			Jun 30			Sep 30			Sep 30			Mar 31
Revensues	$	104,884		$	119,454						$	224,339		$	100,496		$	109,286		$	53,793		$	39,180		$	302,755		$	209,782
Operating Margin	30,693			32,142							62,835			29,509			29,647			17,328			14,191			90,675			59,156
Cost of Operations	15,129			15,618							30,747			15,789			15,749			17,249			15,597			64,384			31,538
Operating Income (Loss)	15,564			16,524			0		0		32,088			13,720			13,898			79			(1,406		)	26,291			27,618
Interest and Other	3,116			3,121							6,237			3,199			3,112			3,197			2,946			12,454			6,311
Income Taxes	4,543			4,892							9,436			3,840			3,937			(1,138		)	(1,906		)	4,733			7,777
Net Income (Loss)	$	7,905		$	8,511		$	—	$	—	$	16,415		$	6,681		$	6,849		$	(1,980	)	$	(2,446	)	$	9,104		$	13,530
Common Shares Outstanding:
End of Period	11,181			11,210							11,210			11,045			11,071			11,101			11,132			11,132			11,071
Average	11,158			11,196							11,177			11,045			11,057			11,086			11,114			11,075			11,051
Earnings (Loss) Per Share																��
Basic	$	0.71		$	0.76						$	1.47		$	0.61		$	0.62		$	(0.18	)	$	(0.22	)	$	0.82		$	1.22
Diluted	$	0.71		$	0.76						$	1.47		$	0.60		$	0.62		$	(0.18	)	$	(0.22	)	$	0.82		$	1.22
Dividends Paid per share	$	0.24		$	0.24						$	0.48		$	0.24		$	0.24		$	0.24		$	0.24		$	0.96		$	0.48
Capital Expenditures (net)	$	10,216		$	9,672						$	19,888		$	5,524		$	5,254		$	6,063		$	10,852		$	27,693		$	10,778
Book Value Per Share	$	10.61		$	11.15						$	11.15		$	10.70		$	11.10		$	10.70		$	10.11		$	10.11		$	11.10
Market Closing Price	$	21.09		$	21.79						$	21.79		$	20.00		$	19.40		$	19.10		$	19.60		$	19.60		$	19.40
Active Customers (End of Period)	216			218							218			207			209			207			206			206			209
Gas Deliveries (Therms):
Residential & Commercial	86,070			96,038							182,109			79,638			84,967			37,465			20,741			222,811			164,605
Industrial & Other	260,887			223,894							484,780			260,369			252,025			176,667			250,041			939,102			512,394
Degree Days
5-Year Average	2,084			2,264							4,348			2,066			2,275			838			263			5,415			4,314
Actual	2,106			2,249							4,355			2,027			2,049			826			140			5,042			4,076
Colder (warmer) than 5-year avg.	1		%	(1		)%					0		%	(2		)%	(10		)%	(1		)%	(41		)%	(7		)%	(6		)%