SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 1995 Commission File Number 1-9905

ATLANTA GAS LIGHT COMPANY
(Exact name of registrant as specified in its charter)

Georgia 58-0145925
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

303 Peachtree Street, N.E., Atlanta, Georgia 30308
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: 404-584-4000

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, $5 Par Value New York Stock Exchange
Depositary Preferred Shares New York Stock Exchange
(Title of Class) (Name of exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act:

Cumulative Preferred Stock, $100 Par Value
(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months, and (2) has been subject to such
filing requirements for the past 90 days. Yes X No

Aggregate market value of the voting stock held by non-affiliates of the
registrant, computed by reference to the closing price of such stock as of
November 30, 1995: $1,052,321,837.

The number of shares of Common Stock outstanding as of November 30, 1995 was
55,023,364 shares (as adjusted for a 2-for-1 stock split paid in the form of
a 100% stock dividend on December 1, 1995).

DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the 1995 Annual Report for the fiscal year ended September 30,
1995 are incorporated herein by reference in Part II and portions of the
Proxy Statement for the 1996 Annual Meeting of Shareholders are incorporated
herein by reference in Part III.

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

TABLE OF CONTENTS

Page
PART I
Item 1. Business. . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 2. Properties. . . . . . . . . . . . . . . . . . . . . . . . . 13
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . 13
Item 4. Submission of Matters to a Vote of Security Holders . . . . 16
Item 4.(A)Executive Officers of the Registrant . . . . . . . . . . . 17

PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters . . . . . . . . . . . . . . . . . . . . . . . . . 18
Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . . 18
Item 7. Management's Discussion and Analysis of Results of Operations and
Financial Condition . . . . . . . . . . . . . . . . . . . 18
Item 8. Financial Statements and Supplementary Data . . . . . . . . 18
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure. . . . . . . . . . . . . . . . . . . 19

PART III
Item 10. Directors and Executive Officers of the Registrant. . . . . 19
Item 11. Executive Compensation. . . . . . . . . . . . . . . . . . . 19
Item 12. Security Ownership of Certain Beneficial Owners and Management.19
Item 13. Certain Relationships and Related Transactions. . . . . . . 19

PART IV
Item 14.Exhibits, Financial Statement Schedules and Reports on
on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . 20

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Part I

Item 1. Business

GENERAL

Atlanta Gas Light Company (AGL) was incorporated on February 16, 1856 by a
special act of the Georgia General Assembly. Unless noted specifically or
otherwise required by the context, reference to the "Company" includes AGL
and its wholly owned subsidiaries, AGL Energy Services, Inc., AGL
Investments, Inc., Chattanooga Gas Company (Chattanooga), Georgia Gas
Company, Georgia Gas Service Company, Georgia Energy Company and Trustees
Investments, Inc. The Company is predominantly engaged in the distribution
of natural gas to customers in central, northwest, northeast and southeast
Georgia and the Chattanooga, Tennessee area.

The Company's major service area is the ten county metropolitan Atlanta area.
Metropolitan Atlanta has an estimated population of 2.9 million, constituting
approximately 41% of the total population of Georgia. Approximately 66% of
the Company's natural gas customers are located in the Atlanta metropolitan
area. These customers consume 45% of the natural gas sold and transported and
provide approximately 63% of the gas revenues of the Company. The Company's
other principal service areas in Georgia are the Athens, Augusta, Brunswick,
Macon, Rome, Savannah and Valdosta areas. During the fiscal year ended
September 30, 1995, the Company supplied natural gas service to an average of
approximately 1.3 million customers in Georgia including 531 centrally
metered customers serving 52,555 apartment units. The Company provides
natural gas service in 229 cities and surrounding areas in Georgia. In
addition to the Company's service areas in Georgia, natural gas service was
supplied by Chattanooga to an average of approximately 49,000 customers in
Chattanooga and Cleveland, Tennessee, and surrounding portions of Hamilton
County and Bradley County, Tennessee during the fiscal year ended September
30, 1995. All of the Company's natural gas service area is certificated by
the Georgia Public Service Commission (Georgia Commission) and the Tennessee
Public Service Commission (Tennessee Commission).

The areas served by the Company in Georgia outside the metropolitan areas
described in the preceding paragraph were for many years primarily
agricultural, with timber, poultry, cattle, cotton, tobacco, peanuts and soy
beans among the principal products. However, both industry and agriculture
are currently important to the economies of these areas. In addition to the
industries that use local natural resources such as pulpwood, clay, marble,
talc and kaolin, the Company serves a number of nationally known
organizations that operate installations in Georgia. These operations
increase substantially the diversification of industry in the Company's
service area.

During fiscal 1995, the Company added approximately 37,000 customers, based
on 12-month average calculations, representing an increase over the prior
year of approximately 2.8%. Substantially all of this growth was in the
residential and small commercial service categories.

The ten largest customers of the Company accounted for 3.1% and 1.8% of total
operating revenues and operating margin, respectively, for the fiscal year
ended September 30, 1995. For the same period, volumes of gas sold and
transported to the ten largest customers accounted for 12.6% of total volumes
of gas sold and transported.

Consolidated operating revenues during the fiscal year ended September 30,
1995 were $1.1 billion, of which approximately 57% was derived from
residential customers, 23% from commercial customers, 16% from industrial
customers, 2% from transportation customers and 2% other.

In addition to its predominant business of natural gas distribution, the
Company, through wholly owned subsidiaries, serves approximately 17,000
customers in Georgia and Alabama with liquefied petroleum gas and also has
interests in gas production activities, real estate holdings and natural gas
vehicle conversions. The aggregate net income contributed by diversified
operations in fiscal 1995 was $0.9 million.

On August 31, 1995, the Company signed an agreement with Sonat Inc. (Sonat)
to form a joint venture to acquire the business of Sonat Marketing Company, a
wholly owned subsidiary of Sonat. The joint venture, Sonat Marketing Company
L.P. (Sonat Marketing), offers natural gas sales, transportation, risk
management and storage services to natural gas users in key natural gas
producing and consuming areas of the United States.

The Company invested $32.6 million for a 35% ownership interest in Sonat
Marketing. The Company's 35% investment is being accounted for under the
equity method. The Company has certain rights for a period of five years to
sell its interest to Sonat at a predetermined fixed price, as defined, or for
fair market value at any time.

Through September 30, 1995, the Company's historic maximum daily sendout was
1.943 billion cubic feet which occurred on January 18, 1994. The mean
temperature in the metropolitan Atlanta area that day was 23 degrees F. The
Company's business is highly seasonal in nature and heavily dependent on
weather because of the substantial use of gas for heating purposes. However,
the Company has implemented weather normalization adjustment riders. The
weather normalization adjustment riders, which were approved by the Georgia
and Tennessee Commissions, offset the impact that either unusually cold or
unusually warm weather has upon the Company's operating margin, earnings and
cash flow and are designed to stabilize the Company's operating margin and
earnings at the levels which would occur with normal weather. For the
effects of seasonal variations on the Company's quarterly earnings, see Note
15 in Notes to Consolidated Financial Statements in the Company's 1995 Annual
Report to Shareholders.

On September 30, 1995, the Company had 2,941 employees. Approximately 750 of
AGL's employees are covered by provisions of collective bargaining agreements
with the General Teamsters Local Union No. 528. The master agreement with
the Teamsters provides for a general wage increase of 3% effective September
18, 1995. This agreement expires September 15, 1996.

The Company also has a collective bargaining agreement covering
approximately 60 employees in Savannah, Georgia. A three-year agreement with
the International Union of Operating Engineers, Local Union No. 474, was
ratified on November 9, 1994. The contract stipulates that wages will be
negotiated in 1995 and 1996. Wages subsequent to November 9, 1995 are still
being negotiated.

The Company also has approximately 60 employees at its Chattanooga and
Cleveland, Tennessee facilities covered by an agreement with the Utility
Workers Union of America, Local Union No. 461. A new three-year agreement
with the Utility Workers became effective on November 28, 1994, and specifies
that wages will be negotiated in 1995 and 1996. Wages subsequent to November
28, 1995 are still being negotiated.

The Company holds franchises, permits, certificates and rights which
management believes are sufficient for the operation of its properties
without any substantial restrictions and adequate for the operation of its
gas distribution business.

Corporate Restructuring

In November 1994, the Company announced a corporate restructuring plan and
began its implementation during fiscal 1995. As a result of the
restructuring, the Company has combined offices and established centralized
customer service centers. During 1995, the Company reduced the average
number of employees by approximately 500 through voluntary retirement and
severance programs and attrition. The Company recorded $43.1 million, after
income taxes, in restructuring-related expenses during 1995.

As a result of the restructuring, the Company expects considerable reductions
in future annual operating expenses, which should enable the Company to be
more competitive.

Subsequent Event

On November 27, 1995, the Company filed with the Securities and Exchange
Commission (SEC) and the Georgia Commission to form a holding company, AGL
Resources Inc. (the Holding Company). The Holding Company would become the
parent corporation of Atlanta Gas Light Company and its subsidiaries. In
addition to the SEC and Georgia Commission approvals, the Company will seek
shareholder approval of the reorganization at the 1996 annual shareholders
meeting.

If approved, holders of Atlanta Gas Light Company common stock will become
holders of the Holding Company common stock, and the present stock
certificates representing Atlanta Gas Light Company common stock will
represent the Holding Company common stock on a share-for-share basis. The
Holding Company common stock is expected to be approved for listing on the
New York Stock Exchange. If requisite approvals are obtained, it is
anticipated that the reorganization into holding company structure will be
completed during the second fiscal quarter of 1996.

The purpose of the formation of the holding company is to separate the
Company's regulated business from its unregulated business, which will allow
the Company to adapt to the increasingly deregulated energy marketplace and
take advantage of potential business opportunities.

The remainder of this page was intentionally left blank.

Gas Sales and Statistics

FOR THE YEARS ENDED SEPTEMBER 30
1995 1994 1993 1992 1991
Operating Revenues (Millions of Dollars)

Sales of Gas
Residential $ 610.6 $ 700.7 $ 658.2 $ 575.7 $ 550.2
Commercial 243.2 285.8 268.1 231.5 226.0
Industrial 169.4 172.1 154.2 140.9 144.1
Transportation Revenues 23.9 22.6 33.8 36.6 37.8
Miscellaneous Revenues 15.9 18.7 16.0 9.9 5.7
Total $ 1,063.0 $ 1,199.9 $ 1,130.3 $ 994.6 $ 963.8
Therms Sold (Millions)
Residential 916.8 1,003.1 1,001.4 915.4 819.5
Commercial 454.0 478.9 478.5 433.9 402.8
Industrial 526.0 424.8 388.7 445.0 455.1
Therms Transported 722.8 697.4 795.6 901.8 862.6
Total 2,619.6 2,604.2 2,664.2 2,696.1 2,540.0
Number of Customers (Average in Thousands)
Residential 1,250.4 1,215.2 1,182.7 1,152.2 1,124.0
Commercial 100.0 98.0 95.7 93.7 92.0
Industrial 2.6 2.5 2.5 2.5 2.5
Total 1,353.0 1,315.7 1,280.9 1,248.4 1,218.5
Sales, Average Residential Customer
Gas Sold (Therms) 733 825 847 794 729
Revenue (Dollars) $ 488.32 $ 576.61 $ 556.52 $ 499.65 $ 489.50
Revenue Per Therm (Cents) 66.6 69.9 65.7 62.9 67.1
Degree Days - Atlanta Area
30-Year Normal 2,991 2,991 3,021 3,021 3,021
Actual 2,121 2,565 2,852 2,552 2,273
Percentage of Actual to 30-Year Normal 70.9 85.8 94.4 84.5 75.2
Gas Account (Millions of Therms)
Natural Gas Purchased 1,406.9 1,453.6 1,629.9 1,555.4 1,563.0
Natural Gas Withdrawn from Storage 520.7 500.3 276.4 263.3 148.2
Gas Transported 722.8 697.4 795.6 901.8 862.6
Total Send-Out 2,650.4 2,651.3 2,701.9 2,720.5 2,573.8
Less
Unaccounted For 20.4 37.2 29.0 16.2 24.4
Company Use 10.4 9.9 8.7 8.2 9.4
Sold to Customers and Transported 2,619.6 2,604.2 2,664.2 2,696.1 2,540.0
Cost of Gas (Millions of Dollars)
Natural Gas Purchased $ 389.4 $ 550.1 $ 595.7 $ 487.9 $ 502.5
Natural Gas Withdrawn from Storage 182.4 186.7 105.3 102.6 77.4
Total $ 571.8 $ 736.8 $ 701.0 $ 590.5 $ 579.9
Gas Plant - End of Year (Millions of Dollars)
Gross Plant $ 1,919.9 $ 1,833.2 $ 1,740.6 $ 1,634.8 $ 1,517.0
Net Plant $ 1,336.6 $ 1,279.6 $ 1,217.9 $ 1,157.4 $ 1,081.4
Gross Plant Investment per
Customer (Thousands of Dollars) $ 1.4 $ 1.4 $ 1.4 $ 1.3 $ 1.2
Capital Expenditures (Millions of Dollars) $ 121.7 $ 122.5 $ 122.2 $ 132.9 $ 141.9
Gas Mains - Miles of 3" Equivalent 28,520 27,972 27,390 26,936 26,623
Employees - Average 3,249 3,764 3,764 3,794 3,820
Average Btu Content of Gas 1,027 1,032 1,027 1,024 1,025

GAS SUPPLY SERVICES, PRICING AND COMPETITION
General

The Company is served directly by four interstate pipelines: Southern
Natural Gas Company (Southern), South Georgia Natural Gas Company (South
Georgia), Transcontinental Gas Pipe Line Corporation (Transco) and East
Tennessee Natural Gas Company (East Tennessee) in combination with its
upstream pipeline, Tennessee Gas Pipeline Company (Tennessee), the parent
company and primary source of gas for East Tennessee.

The implementation of Federal Energy Regulatory Commission (FERC) Order 636
mandated the unbundling of interstate pipeline sales service and established
certain open access transportation regulations. The unbundling of pipeline
sales service requires local distribution companies (LDCs), such as AGL and
Chattanooga, to contract directly and separately for wellhead gas supply,
underground storage and firm transportation services. Unbundling also shifts
the responsibility and risk of securing a reliable and cost-effective gas
services portfolio from the pipelines to LDCs such as AGL and Chattanooga
(See Part I, Item 1, "Federal Regulatory Matters - Order 636.")

As a result of Order 636, gas purchasing decisions made by LDCs may be
subject to greater review by state regulatory commissions. Prior to the
implementation of Order 636, the cost of bundled pipeline sales service was
reviewed and approved by the FERC. Because of diminished review by the FERC,
LDCs face greater accountability and risks from their purchasing practices
for gas supply, transportation and storage services.

During the 1994 session of the Georgia General Assembly, legislation was
passed that provides for annual review and approval by the Georgia Commission
of AGL's gas services portfolio on a prospective basis. The legislation
requires the filing of a gas supply plan with the Georgia Commission on or
before August 1 of each year for the subsequent fiscal year. Purchases made
pursuant to an approved plan are recovered under the purchased gas provisions
of AGL's rate schedules.

On August 1, 1995, AGL filed its gas supply plan consisting of an array of
gas supply, transportation and storage options designed to provide reliable
service to firm customers at the best cost for fiscal year 1996. On
September 14, 1995, the Georgia Commission approved AGL's gas supply plan for
fiscal year 1996 (See Part I, Item 1, "State Regulatory Matters - Gas Supply
Filing.")

Firm Pipeline Transportation and Underground Storage

The table on the following page shows the amount of firm transportation and
describes the types and amounts of underground storage that both AGL and
Chattanooga have elected or been assigned under Order 636. The table also
shows services that were not affected by the implementation of Order 636.

Production
Area Supplemental
Maximum Underground Underground
Firm Storage Storage
Trans- Maximum Maximum
portation Withdrawal Withdrawal Expiration
Mcf/Day Mcf/Day(1) Mcf/Day(2) Date
Atlanta Gas Light Company
Southern
Firm Transportation 1,000 June 30, 2007
Firm Transportation 650,129 February 28, 1998
Firm Transportation 110,905 April 30, 2007
CSS 406,222 February 28, 1998
ANR-50 113,000 March 31, 2003
ANR-100 55,500 March 31, 2003
Transco
Firm Transportation 107,600 March 31, 2010
Firm Transportation 15,000 July 1, 2005
Firm Transportation 6,222 March 17, 2008
Firm Transportation 4,500 October 31, 2009
WSS 70,588 March 31, 2010
Eminence Storage 12,011 March 31, 1997(3)
Eminence Storage 20,298 March 31, 2001(3)
GSS 124,935 March 31, 1992(3)
LSS 17,430 March 31, 1994(3)
SS-1 20,211 March 31, 2009
LGA 41,522 October 31, 1991(3)
Tennessee/East Tennessee
Firm Transportation 62,000 November 1, 2000(3)
FSS 20,000 November 1, 2000
FSM 8,533 November 1, 2000
FSP 1,837 November 1, 2000
CNG 3,421 March 31, 2001
Southern/South Georgia
Firm Transportation 11,877 April 30, 2007
ANR-100 708 March 31, 2004
CSS 6,764 February 28, 1998
Total 969,233 549,674 373,306

Chattanooga Gas Company
Southern
Firm Transportation 4,756 June 30, 2007
Firm Transportation 13,944 February 28, 1998
Firm Transportation 3,300 April 30, 2007
CSS 14,051 February 28, 1998
Tennessee/East Tennessee
Firm Transportation 45,000 November 1, 2000(3)
FSS 12,300 November 1, 2000
FSM 6,193 November 1, 2000
FSP 1,333 November 1, 2000
CNG 2,483 March 31, 2001
Total 67,000 36,360

(1)Production area storage requires a complementary amount of the firm
transportation capacity identified in the first column to move storage gas
withdrawals to the Company's service area.
(2)Supplemental underground storage includes delivery to the Company's
service area and does not require any of the firm transportation capacity
identified in the first column.
(3)The Company is operating under Natural Gas Act (NGA) certificate
authority.

Wellhead Supply

AGL and Chattanooga have entered into firm wellhead supply contracts of
approximately 398,000 Mcf/day and approximately 26,000 Mcf/day, respectively,
to supply their firm transportation and underground storage requirements.
The Company anticipates entering into additional firm wellhead supply
contracts by the end of December 1995 of up to approximately 104,000 Mcf/day
for AGL and approximately 7,800 Mcf/day for Chattanooga. The Company also
purchases spot market gas as needed during the year.

Liquefied Natural Gas

To meet the demand for natural gas on the coldest days of the winter months,
the Company must also maintain sufficient supplemental quantities of
liquefied natural gas (LNG) in its supply portfolio. The Company's three
strategically located Georgia-based LNG plants -- north and south of Atlanta
and near Macon -- provide a combined maximum daily supplement of
approximately 665,000 Mcf and a combined usable storage capacity of 72
million gallons, equivalent to approximately 5,952,000 Mcf. Chattanooga's LNG
plant provides a maximum daily supplement of approximately 90,000 Mcf and has
a usable storage capacity of 13 million gallons, equivalent to approximately
1,076,000 Mcf.

Competition

The Company competes to supply natural gas to interruptible customers who are
capable of switching to alternative fuels, including fuel oil, coal, propane,
electricity and, in some cases, combustible wood by-products. The Company
also competes to supply gas to interruptible customers who might seek to
bypass the Company's distribution system.

On February 17, 1995, the Georgia Commission approved a settlement that
permits the Company to negotiate contracts with customers who have the option
of bypassing the Company's facilities (Bypass Customers) and receiving
natural gas from other suppliers. The bypass avoidance contracts (Negotiated
Contracts) can be renewable, provided that the initial term does not exceed
five years, unless a longer term specifically is authorized by the Georgia
Commission. The rate provided by the Negotiated Contract may be lower than
AGL's filed rate, but not less than AGL's marginal cost of service to the
potential Bypass Customer. Service pursuant to a Negotiated Contract may
commence without Georgia Commission action, once a copy of the contract is
filed with the Georgia Commission. Negotiated Contracts may be rejected by
the Georgia Commission within 90 days of filing; absent such action, however,
the Negotiated Contracts remain effective. None of the Negotiated Contracts
filed with the Georgia Commission have been rejected.

The settlement also provides for a bypass loss recovery mechanism to operate
until the earlier of September 30, 1998, or the effective date of new rates
for AGL resulting from a general rate case. Under the recovery mechanism, AGL
is allowed to recover from other customers 75% of the difference between (a)
the non-gas cost revenue that was received from the potential Bypass Customer
during the most recent twelve month period and (b) the non-gas cost revenue
that is calculated to be received from the lower Negotiated Contract rate
applied to the same volumetric level. With respect to the remaining 25% of
the difference, AGL is allowed to retain a 44% share of capacity release
revenues in excess of $5 million until AGL is made whole for discounts from
Negotiated Contracts. To the extent that there are additional capacity
release revenues, AGL is allowed to retain 15% of such amounts.

In addition to Negotiated Contracts, which are designed to serve existing and
potential Bypass Customers, the Company's Interruptible Transportation and
Sales Maintenance (ITSM) Rider continues to permit discounts for short-term
transactions to compete with alternative fuels. Revenue shortfalls,

if any, from interruptible customers as measured by the test-year
interruptible revenues determined by the Georgia Commission in the Company's
1993 rate case will continue to be recovered under the ITSM Rider.

The settlement approved by the Georgia Commission also provides that AGL may
file contracts (Special Contracts) for Georgia Commission approval if the
service cannot be provided through the ITSM Rider, existing rate schedules or
the Negotiated Contract procedures. An example of an application for a
Special Contract would be to provide for a long-term service contract to
compete with alternative fuels where physical bypass was not the relevant
competition.

Since the Georgia Commission's order approving the settlement, AGL has filed,
and is providing service pursuant to, 40 Negotiated Contracts. Additionally,
the Georgia Commission has approved Special Contracts with four additional
customers.

On November 21, 1995, the Georgia Commission issued a Natural Gas Notice of
Inquiry (NOI) which sets forth a procedure and schedule for soliciting
comments from Georgia LDCs and other interested parties concerning how to
work together to move the local distribution of natural gas toward a more
competitive future. Among other opinions expressed within the NOI, the
Georgia Commission recommended pursuing a legislative solution to establish
regulatory rules that will allow for an efficient and customer-responsive
retail natural gas sector. The schedule calls for comments from interested
parties in December 1995 and January 1996.

FEDERAL REGULATORY MATTERS
Order 636

In 1992, FERC issued Order 636 which, among other things, mandated the
unbundling of interstate pipeline sales service and established certain open
access transportation regulations that became effective beginning in the
1993-1994 heating season. In Order 636, FERC acknowledged that, without
special recovery mechanisms, certain costs that previously were recovered in
the pipelines' rate for bundled sales services no longer could be recovered
by the pipelines in a restructured environment. Those costs, referred to as
transition costs, include such things as unrecovered gas costs, gas supply
realignment costs and various stranded costs resulting from unbundling.
Accordingly, Order 636 included a recovery mechanism that allows the pipeline
companies to pass through to their customers any prudently incurred
transition costs attributable to compliance with Order 636.

The Company, based on filings with FERC by its pipeline suppliers, estimates
that its portion of such costs from all of its pipeline suppliers would be
approximately $97.7 million. Such filings currently are pending before FERC
for final approval, and the transition costs are being collected subject to
refund. Approximately $71 million of such costs have been incurred by the
Company as of November 30, 1995, and are being recovered from its customers
under the purchased gas provisions of the Company's rate schedules.
Transition costs have not affected the total cost of gas to the Company's
customers significantly because (1) the Company purchases its wellhead gas
supplies based upon market prices that are below the cost of gas previously
embedded in the bundled pipeline sales service rates and (2) many elements
of transition costs previously were embedded in the rates for the pipelines'
bundled sales service. See Part I, Item 1, "State Regulatory Matters - Gas
Supply Filing" in this Form 10-K for further discussion of recovery of gas
costs.

Details concerning the status of the Order 636 restructuring proceedings
involving the pipelines that serve the Company directly are set forth below.

SOUTHERN Restructuring Proceeding. The Company has filed several
petitions for review with the United States Court of Appeals for the District
of Columbia Circuit concerning various aspects of Southern's restructuring.
These aspects include favorable treatment of small customers, rate
mitigation,

mitigation of gas supply realignment (GSR) costs, and tying of firm storage
service to firm transportation service. The Company's petitions for review
currently are pending with the court, but will be withdrawn if the settlement
between Southern and its customers, discussed below, is approved by
the FERC.

GSR Cost Recovery Proceeding. Southern has made several quarterly GSR
recovery filings, has filed on a monthly basis to revise its GSR billing
determinants, and has made quarterly filings to recover other transition
costs. The Company has entered into a settlement agreement with Southern and
other customers to resolve virtually all pending Southern proceedings before
the FERC and the courts. The FERC approved the settlement on September 29,
1995, but the order approving the settlement is subject to rehearing before
the agency. The settlement would, if approved by the FERC, resolve
Southern's pending general rate proceedings, which relate to Southern's rates
charged from January 1, 1991, through the present. The settlement also
provides for rate reductions and refund offsets against GSR costs. It would
also resolve Southern's Order 636 transition cost proceedings and provide for
revisions to Southern's tariff. Assuming the settlement is approved,
the Company's share of Southern's transition costs is estimated to be $84.5
million. As of November 30, 1995, $65.8 million of such costs have been
incurred by the Company.

TENNESSEE Restructuring Proceeding. The Company has filed several
petitions for review with the United States Court of Appeals for the District
of Columbia Circuit concerning various aspects of Tennessee's restructuring.
These aspects include favorable treatment for small customers, rate
mitigation and others. The Company also has filed a petition for review of
FERC orders concerning Tennessee's service obligation to the Company. The
Company's petitions for review currently are pending with the court.

GSR Cost Recovery Proceeding. Tennessee has made several quarterly GSR
recovery filings. The Company's estimated liability as a result of
Tennessee's prior GSR recovery filings is approximately $8.4 million,
subject to possible reduction based upon the hearing FERC established to
investigate Tennessee's costs. The Company is actively participating in
Tennessee's GSR cost recovery proceeding. As of November 30, 1995, $4.6
million of such costs have been incurred by the Company.

Columbia Gas Transmission Corporation. The Company has filed a petition for
review of a FERC order approving a settlement between Tennessee and Columbia
Gas Transmission Corporation (Columbia). The settlement resolves issues
relating to Columbia's upstream capacity on Tennessee's system, as well as
certain other matters between the two pipelines. The Company has sought
review of the order on the ground that the FERC has failed to ensure that
Tennessee's customers will be made whole with respect to Tennessee's
agreement to permit Columbia to abandon certain contracts for capacity on
Tennessee's system.

FERC Rate Proceedings

The Company also is participating in various rate proceedings before the FERC
involving applications for rate changes filed by its pipeline suppliers,
Southern, Transco, Tennessee and South Georgia. To the extent that these
cases have not been settled, as described below, the rates filed in these
proceedings have been accepted, and made effective subject to refund and the
outcome of the FERC proceedings.

SOUTHERN The Company is participating in two Southern rate proceedings
which affect two prior rate periods, from January 1, 1991 through August 31,
1992, and from September 1, 1992 through April 30, 1993. In each case, the
FERC has approved partial settlement offers. The former settlement reserved
certain issues for briefing before the FERC, but procedures have not yet been
established for such briefing. The latter settlement reserved one contested
issue for hearing and decision. This issue concerns Southern's recovery of
costs associated with its construction of facilities to attach certain
offshore gas supplies. An Administrative Law Judge (ALJ) has ruled that an
earlier settlement bars recovery of the costs in question. This ruling
currently is pending review by the FERC.

Southern's current rate case involves Southern's rates from May 1, 1993
forward, and also involves undue discrimination claims raised by the Company
against Southern. These claims arise out of a settlement between Southern
and Arcadian Corporation (Arcadian) related to the bypass of the Company's
system and certain discounted transportation arrangements entered into
between Southern and Arcadian as a part of the settlement. See Part I, Item
3, "Legal Proceedings." As noted previously, the Company has entered into a
settlement agreement with Southern that will, if approved by the FERC,
resolve virtually all issues between the Company and Southern for Southern's
outstanding rate proceedings, including the undue discrimination issue raised
by the Company in Southern's current rate case.

SOUTH GEORGIA On February 9, 1995, an ALJ issued an initial decision in
South Georgia's rate case that South Georgia's interruptible transportation
(IT) rate should be based on a load factor of 100% on a prospective basis.
AGL supported the 100% load factor IT rate at the hearing in this proceeding.
South Georgia and an intervenor have filed exceptions to the initial decision
with the FERC, and AGL has responded to the exceptions and supported the
initial decision. The FERC has not yet acted on the exceptions.

TENNESSEE On July 24, 1995, a FERC ALJ issued an initial decision
addressing rates to be charged by Tennessee on a prospective basis. Among
other matters, the ALJ approved Tennessee's proposal to decrease the load
factor used to calculate its IT rates from 125% to 100%. The Company
supported a further reduction to 50%, but argued that 100% would be the
highest reasonable load factor. The ALJ also rejected challenges by the
Company and others to Tennessee's "straight-fixed-variable-to-the-wellhead"
rate design for firm transportation rates. Various parties, including the
Company, have filed exceptions to the initial decision, which therefore is
not yet final.

In addition, on December 30, 1994, Tennessee filed a new general rate case
seeking an increase of approximately $117.9 million annually, and reflecting
numerous modifications to its tariff. The impact of that rate increase on
the Company is approximately $2.6 million annually. The FERC has accepted
Tennessee's filing and has set it for hearing. The FERC has also accepted
Tennessee's motion filing to implement slightly lower rates than originally
sought by Tennessee, effective July 1, 1995, subject to refund and the
outcome of the hearing. The Company is actively participating in the hearing
procedures.

TRANSCO On July 19, 1995, a FERC ALJ rejected Transco's proposal to adopt
a "firm-to-the-wellhead" rate structure for firm transportation rates which
would, if approved, shift approximately $60 million in production area fixed
costs into firm transportation rates. In addition, the ALJ determined that
Transco's existing production area rate design is unjust and unreasonable,
and adopted a production area rate design proposal offered by another
intervenor in the proceeding. AGL opposed Transco's "firm-to-the-wellhead"
proposal, but supported Transco's existing production area rate design.
Various parties, including AGL, have filed exceptions to the initial
decision, which therefore is not yet final.

In addition, on March 1, 1995, Transco filed a new general rate case seeking
approximately $132 million in additional revenues annually, and to reflect
numerous modifications to its tariff. The impact of that rate increase on
the Company is approximately $2.2 million annually. The FERC has accepted
Transco's filing, and Transco has implemented its rate increase, effective
September 1, 1995, subject to refund and the outcome of a hearing. AGL is
actively participating in the hearing procedures.

ANR PIPELINE ANR Pipeline (ANR) provides transportation services to
Southern under a case-specific certificate issued by the FERC in 1980.
Southern entered into this transportation arrangement with ANR in order to
provide Southern's customers, including AGL, access to storage facilities
owned and operated by ANR Storage Company. According to Southern,
approximately 96% of Southern's service entitlement on ANR is used to serve
AGL. AGL is participating in ANR's general rate proceeding, and has
protested the proposed rates for ANR's service to Southern. The FERC has
established hearing procedures with respect to ANR's application, and AGL is
actively participating in the hearing, supporting a reduced transportation
rate for ANR's services to Southern.

Arcadian

The FERC has issued an order approving the settlement between Southern and
Arcadian; see Part I, Item 3, "Legal Proceedings." The settlement resolves
both Arcadian's FERC complaint against Southern and Arcadian's antitrust
lawsuit against Southern and AGL. The settlement provides for Southern to
provide firm transportation service to Arcadian at a discounted rate for an
initial term of five years. In addition, the settlement establishes tariff
language addressing the conditions under which Southern will address future
requests for direct transportation service. AGL has sought rehearing of the
FERC's order approving the settlement, and has petitioned for review in the
United States Court of Appeals for the Eleventh Circuit. AGL's appeals are
currently being held in abeyance pending action by the FERC on AGL's
rehearing request. The settlement between Southern and AGL will, if
approved, resolve the undue discrimination issue raised by AGL in Southern's
current rate case.

The Company cannot predict the outcome of these federal proceedings nor can
it determine the effect, if any, such proceedings may have on the Company.

STATE REGULATORY MATTERS

Atlanta Gas Light Company

1993 Rate Case

On March 31, 1993, AGL made a rate filing with the Georgia Commission seeking
an increase in revenues of $62.5 million annually, based upon a test year
ending September 30, 1994. During the course of the rate proceedings, AGL
modified its requested increase to $47 million to reflect changes in
conditions expected during the test year. On September 29, 1993, the
Georgia Commission approved an annual increase in revenues of approximately
$11.2 million, effective October 1, 1993.

In its decision, the Georgia Commission approved a restructuring of AGL's
interruptible service rates. The Georgia Commission, however, did not
approve the redesigned firm service rates proposed by AGL. On October 12,
1993, AGL filed a petition with the Georgia Commission for rehearing,
reconsideration and oral argument with respect to the redesigned firm service
rates. Oral argument was heard on December 2, 1993. On September 25, 1995,
the Georgia Commission issued an order revising firm service rates, on a
revenue neutral basis, to more accurately reflect the cost to serve those
customers.

Economic Development Policy

On September 19, 1993, the Georgia Commission initiated an investigation of
Economic Development Incentive Policies of the utilities under its
jurisdiction. On November 3, 1994, the Georgia Commission issued a final
order establishing guidelines for utility economic development incentives
which are designed to provide incentives to industrial customers to locate or
expand facilities in Georgia. On December 19, 1994, AGL filed its proposed
economic development incentive program in compliance with the Georgia
Commission's order. As filed, the AGL Economic Development Policy is
designed to promote economic development within the context of its approved
Integrated Resource Plan (IRP) by providing cost-effective job creation
incentive payments and investment incentive payments to industrial customers
where such payments provide positive benefits both to AGL and its new and
existing industrial customers.

On October 3, 1995 the Georgia Commission approved AGL's filed program with
one modification. As a result, on November 29, 1995, AGL withdrew the
Economic Development Incentive Program it filed with the Georgia Commission
on December 19, 1994 and filed a revised Economic Development Incentive
Program that provides investment incentive payments under AGL's approved IRP.

Gas Supply Filing

Federal restructuring resulting from the implementation of Order 636 caused
LDCs to face greater accountability and risks related to their purchasing
practices for gas supply, transportation and storage services. As a result,
during the 1994 session of the Georgia General Assembly, legislation was
passed that provides for annual review and approval by the Georgia Commission
of AGL's gas services portfolio on a prospective basis.
The legislation requires AGL to file a gas supply plan with the Georgia
Commission on or before August 1 of each year for the subsequent fiscal year.
Purchases made pursuant to an approved plan may be recovered under the
purchased gas provisions of AGL's rate schedules.

On August 1, 1995, AGL filed its gas supply plan consisting of an array of
gas supply, transportation and storage options designed to provide reliable
service to firm customers at the best cost for fiscal year 1996. On
September 14, 1995, the Georgia Commission approved AGL's gas supply plan for
fiscal year 1996. In addition to approving the array of services AGL
proposed, the Georgia Commission also approved the recovery of Order 636
transition costs that currently are being collected by AGL's pipeline
suppliers.

Other Commission Proceedings

On July 21, 1995, AGL filed with the Georgia Commission a request to approve
a refund of $38.5 million of the revenues collected through the Purchased Gas
Adjustment (PGA) Rider since October 1994. On August 23, 1995, the Georgia
Commission approved a $38.5 million refund of deferred purchased gas costs,
plus interest. The refund resulted from the overrecovery of gas costs by AGL
through the PGA Rider. The refund was credited to customers' bills in
September 1995.

The staff of the Georgia Commission has undertaken a financial and
management process audit related to AGL's former manufactured gas plant
sites. The result of such audit is not expected to have a significant
effect on the Company's consolidated financial statements. See Part I, Item
3, "Legal Proceedings - Environmental Matters."

Chattanooga Gas Company

On May 1, 1995, Chattanooga filed a rate proceeding with the Tennessee
Commission seeking an increase in revenues of $5.2 million annually. On
September 27, 1995, a settlement agreement was reached that provides for an
annual increase in revenues of approximately $2.5 million, effective November
1, 1995.

The Company cannot predict the outcome of pending state regulatory matters
nor can it determine the ultimate effect, if any, such proceedings may have
on the Company.

Item 2. Properties

The Company's properties consist primarily of distribution systems and
related facilities and local offices serving 229 cities and surrounding areas
in the State of Georgia and 2 cities and surrounding areas in the State of
Tennessee. As of September 30, 1995, AGL had 25,043 miles of mains and
5,952,000 Mcf of LNG storage capacity in three LNG plants to supplement the
gas supply in very cold weather or emergencies. Chattanooga had 1,308 miles
of mains and 1,076,000 Mcf of LNG storage capacity in its one LNG plant.

At September 30, 1995, the Company's gross utility plant amounted to
approximately $1.9 billion.

Item 3. Legal Proceedings

The nature of the Company's business ordinarily results in periodic
regulatory proceedings before various state and federal authorities as well
as litigation incidental to the business. For information regarding
regulatory proceedings, see the preceding sections in Part I, Item 1,
"Business - Federal Regulatory Matters" and "Business - State Regulatory
Matters."

Arcadian

Arcadian Corporation v. Southern Natural Gas Company and Atlanta Gas Light
Company, U. S. District Court for the Southern District of Georgia, Augusta
Division, Case No. CV192-006. On January 10, 1992, Arcadian, an industrial
customer of AGL, filed a complaint against Southern and AGL alleging
violation of the federal antitrust laws and seeking treble damages in excess
of $45 million. In the complaint, Arcadian alleged that Southern and AGL
conspired to restrain trade by agreeing not to compete in the provision of
direct transportation service to end users in the areas served by the
Company. The Company denied the allegations of the complaint.

On November 30, 1993, a proposed settlement between Southern and Arcadian was
filed with FERC that would resolve both Arcadian's FERC complaint against
Southern and Arcadian's antitrust lawsuit against Southern and AGL. The
settlement provided for firm and interruptible transportation service from
Southern to Arcadian at discounted rates for an initial term of five years.
In addition, the settlement establishes tariff conditions for addressing
future requests for direct transportation service. In connection with the
proposed settlement, the antitrust lawsuit has been stayed and
administratively closed. On May 12, 1994, FERC approved the settlement over
AGL's objections. AGL has sought rehearing of the FERC's order approving the
settlement, and has petitioned for review in the United States Court of
Appeals for the Eleventh Circuit. AGL's appeals are currently being held in
abeyance pending action by the FERC on AGL's rehearing request.

Environmental Matters

Prior to the general availability of natural gas in the 1800s and early
1900s, manufactured gas was a chief source of gas for lighting and heat
nationwide. The process involved heating certain combustibles such as coal,
oil and pine knots in a low oxygen atmosphere. Gas was manufactured by this
process at over 1,500 different sites throughout the country. The residue
from this process, including lampblack and coal tar, was typically stored on
site or sold for commercial use. Such plants were operated in Georgia until
the early 1950s.

In June 1990, the Company was contacted by attorneys for Florida Public
Utilities Company (FPUC) in connection with a former manufactured gas plant
(MGP) site in Sanford, Florida. Thereafter, FPUC received a "Warning Notice"
from the Florida Department of Environmental Regulation (FDER) demanding that
FPUC enter into a consent order to investigate the Sanford site. Preliminary
investigation results indicate some environmental impacts at this site. In
addition, limited investigations of the surrounding area indicate potential
environmental impacts off-site. On January 31, 1992, FPUC filed suit against
the Company, two other corporations and the City of Sanford, under the
federal Comprehensive Environmental Response, Compensation and Liability Act,
and an equivalent state statute, alleging the Company is a former "owner," to
obtain contribution from the Company and others for all costs incurred and
for a declaratory judgment that all defendants are jointly and severally
liable for future response costs. On May 15, 1992, the Court administratively
terminated the case for one year while the parties, pursuant to an agreement,
attempted to determine the nature and extent of impacts at the Sanford MGP
site. By letter dated September 11, 1992, FPUC responded to the "Warning
Notice" issued by FDER and proposed to conduct a joint investigation of the
site under FDER supervision, without the entry of any formal order. By
letter dated September 23, 1992, FDER rejected this proposal. Pursuant to an
agreement among the parties to fund the conduct of further studies, an
administrative termination of the case was reinstituted. On February 3, 1994,
the parties submitted a Contamination Assessment Report (CAR) to the Florida
Department of Environmental Protection (FDEP), previously known as FDER.
The CAR confirmed the existence of environmental impacts at the site and
off-site. On April 10, 1994, FDEP completed its review of the CAR and
submitted a preliminary scoring of the site to Region IV of the U. S.
Environmental Protection Agency (EPA). FDEP concluded that further study is
necessary in some areas because the site did not exceed the listing threshold
under one set of assumptions but did exceed that threshold under different
assumptions. On February 17, 1995, FPUC dismissed its lawsuit without
prejudice. The EPA has requested that FPUC conduct an Expanded Site
Investigation (ESI) of the Sanford site and the nearby area. FPUC declined
and it is expected that EPA will conduct the ESI.

In addition to the Sanford site noted above, there are two other sites in
Florida presently being investigated by environmental authorities in
connection with which the Company may be contacted as a potentially
responsible party. No claim has been made by any party regarding these
sites.

AGL has identified nine sites in Georgia where it currently owns all or part
of an MGP site. These sites are located in Athens, Augusta, Brunswick,
Griffin, Macon, Rome, Savannah, Valdosta and Waycross. In addition, AGL has
identified three other sites in Georgia which AGL does not now own, but which
may have been associated with the operation of MGPs by AGL or its
predecessors. These sites are located in Atlanta (2) and Macon. A
Preliminary Assessment (PA) has been conducted at each of these sites and a
subsequent Site Investigation (SI) was conducted at ten of the twelve sites
(all but the two Atlanta sites). Results from these investigations reveal
environmental impacts at and near nine sites (all but the two Atlanta sites
and the second Macon site).

AGL has entered into consent orders with the Georgia Environmental Protection
Division (EPD) with respect to four sites (Augusta, Griffin, Savannah and
Valdosta) pursuant to which AGL is obligated to investigate and clean-up, if
necessary, these sites. The Company has submitted to EPD the PA/SIs for each
site. The Company, in response to a request by EPD, also has submitted the
SI for the Athens site. For the four sites subject to EPD orders, the orders
require the Company, if necessary, to conduct additional investigations
sufficient to develop a Corrective Action Plan (CAP), which will provide a
proposal for cleanup of groundwater, surface water and soil at and near each
consent order site. This CAP will then be submitted to EPD for review and
approval. Within 180 days of approval of the CAP by EPD, AGL must complete
installation of all remedial structures called for in the CAP. The Company
developed a proposed CAP for the Griffin site, and submitted the CAP to EPD
for review. Additional assessment activities are now being conducted, and
the Company expects to submit a revised CAP for

Griffin in January 1996. Assessment activities are being conducted at Augusta
and Savannah. In addition, further studies are underway at the Athens site.
AGL expects these activities in Augusta, Savannah and Athens to be completed
in early 1996.

On March 22, 1994, AGL submitted to the EPD, under regulations issued by EPD
under the Georgia Hazardous Site Response Act (HSRA), formal notifications
pertaining to MGP site conditions at seven of the eight then owned MGP sites:
Athens, Augusta, Brunswick, Macon, Savannah, Valdosta and Waycross. On
November 4, 1994, the Company submitted a notification for the acquired
portion of the Griffin site. EPD has completed its initial review of these
submissions, has eliminated one site (Macon) from further consideration at
this time, and has listed the seven remaining sites (Athens, Augusta,
Brunswick, Griffin, Savannah, Valdosta and Waycross) on Georgia's "Hazardous
Site Inventory" (HSI). EPD has also listed the Rome MGP site with which AGL
has been associated and which is the subject of pending litigation. Under the
HSRA regulations, the sites subject to consent orders (Augusta, Griffin,
Savannah and Valdosta) are presumed to require corrective action. EPD will
determine whether corrective action is required at any or all of the
remaining four sites (Athens, Brunswick, Rome and Waycross). EPD had
requested Compliance Status Reports (CSRs) for Athens, Brunswick and Rome.

The Company has estimated the investigation and remediation expenses likely
to be associated with the former MGP sites. First, for some sites, the
Company has determined that its liability, if any, for future investigation
and cleanup expenses is likely to arise from claims by potentially
responsible parties, or equivalent proceedings by the government, for
contribution and/or cost recovery. Under such circumstances, although the
Company may be jointly and severally liable for all investigation and cleanup
expenses, the probable amount of the Company's ultimate liability is likely
to be limited to the Company's equitable share of such expenses under the
circumstances. Accordingly, the Company has adjusted the range of future
investigation and cleanup expenses for these sites by estimating, where
possible, the range of reasonably possible values for the Company's share of
such expenses, given the current methods of equitable apportionment and the
Company's knowledge of relevant facts, including the solvency of potential
contributors and likely disputes over appropriate shares. In all other cases
where such values were not reasonably estimable, the Company has simply
continued to use a range of expenses without adjustment for the Company's
equitable share. Second, the issuance of regulations under HSRA and the
listing of MGP sites on the HSI has altered the basis upon which the Company
has projected future investigation and remediation costs associated with the
former MGP sites in Georgia. Under a thorough analysis of these and other
current potentially applicable requirements, the Company has estimated that,
under the most favorable circumstances reasonably possible, the future cost
of investigating and remediating the former MGP sites could be as low as
$28.6 million. Alternatively, the Company has estimated that, under the
least favorable circumstances reasonably possible, the future cost of
investigating and remediating the former MGP sites could be as high as $109
million. The Company cannot estimate at this time the amount of any other
future expenses or liabilities, or the impact on these estimates of future
environmental regulatory changes, that may be associated with or related to
the MGP sites, including expenses or liabilities relating to any litigation.
At the present time, no amount within the range can be identified as a better
estimate than any other estimate. Therefore, a liability for the low end of
this range and a corresponding regulatory asset have been recorded in the
financial statements.

The Georgia Commission has approved the recovery by AGL of Environmental
Response Costs, as defined below, effective October 1, 1992, pursuant to
AGL's Environmental Response Cost Recovery Rider (ERCRR). For purposes of
the ERCRR, Environmental Response Costs include investigation, testing,
remediation and litigation costs and expenses or other liabilities relating
to or arising from MGP sites. AGL is permitted to recover from its
ratepayers Environmental Response Costs that it may incur in succeeding
12-month periods ending each June 30, net of working capital benefits
resulting from deferred income taxes, amortized over a 60-month recovery
period beginning each October 1. The

carrying costs to AGL of Environmental Response Costs during the period of
amortization are subject to recovery from any amounts received from insurance
carriers and from former owners or operators of MGP sites. Any amounts
received from such sources are shared equally by AGL and its customers. AGL
records its portion as income to offset unrecovered carrying costs. AGL has
recorded income to date of $0.8 million as a result of amounts received from
such sources.

In connection with the ERCRR, the staff of the Georgia Commission has
undertaken a financial and management process audit related to the MGP sites,
cleanup activities at the sites and Environmental Response Costs which have
been incurred for purposes of the ERCRR. The result of such audit is not
expected to have a significant effect on the Company's consolidated financial
statements.

The Company notified its insurance carriers and filed a declaratory judgment
action against 23 insurance companies in the United States District Court for
the Northern District of Georgia, seeking a determination that various
policies held by the Company provide coverage for Environmental Response
Costs. Nine of the 23 carriers named in the action have settled with the
Company. On October 8, 1993, the Court granted summary judgment to the
remaining carriers on the basis that the Company provided untimely notice.
The Court entered a final judgment in favor of the defendants. On October
20, 1995, the Eleventh Circuit Court of Appeals reversed the grant of summary
judgment and remanded the case to the trial court, with instructions to
dismiss the case on the grounds that there was no case or controversy when
filed. The Company has not determined the nature or extent of actions it
will take as a result of this decision.

On November 14, 1995, one of the insurance companies named in the declaratory
judgment action initiated a new action against the Company in the United
States District Court for the Northern District of Georgia seeking a
declaratory judgment that it is not obligated to provide insurance coverage
for third party damage resulting from the operation of the former MGP sites.
The Company has not been served with the summons and the Company and the
insurance carrier have entered into an agreement not to pursue the action for
a period of time.

With regard to other legal proceedings related to the former MGP sites, the
Company is or expects to be a party to claims or counterclaims on an ongoing
basis. Among such matters, the Company intends to continue to pursue
insurance coverage and contribution from potentially responsible parties.
Management currently believes that the outcome of MGP-related litigation in
which the Company is involved will not have a material adverse effect on the
financial condition and results of operations of the Company.

As a result of the ERCRR, the Company expects that it will be able to recover
all of its Environmental Response Costs. See Note 10 in Notes to
Consolidated Financial Statements in the Company's 1995 Annual Report to
Shareholders.

Other Legal Proceedings

With regard to other legal proceedings, the Company is a party, as both
plaintiff and defendant, to a number of other suits, claims and counterclaims
on an ongoing basis. Management believes that the outcome of all litigation
in which it is involved will not have a material adverse effect on the
consolidated financial statements of the Company.

Item 4. Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.

Item 4.(A) Executive Officers of the Registrant

Set forth below, in accordance with General Instruction G(3) of Form 10-K and
Instruction 3 of Item 401(b) of Regulation S-K, is certain information
regarding the executive officers of AGL. Unless otherwise indicated, the
information set forth is as of September 30, 1995.

Other Offices
Held Present Held During
Name and Position Age Office Since Past Five Years

David R. Jones 58 February 1988
President and Chief
Executive Officer and
Director

Charles W. Bass 48 November 1994 (1)Senior Vice
Executive Vice President - President -
Market Service Governmental and
and Development Regulatory Affairs

Thomas H. Benson 50 November 1994 (1)Senior Vice
Executive Vice President - President -
Customer Operations Operations and
Engineering

Robert L. Goocher 45 November 1994 (1)Senior Vice
Executive Vice President - President, Chief
Business Support Financial Officer
and Secretary
(2)Vice President -
Finance
(3)Vice President -
Augusta Division

Charlie J. Lail 56 November 1994 (1)Senior Vice
Senior Vice President - President -
Operations Improvement Divisions
(2)Vice President -
Divisions
(3)Vice President -
Northeast Georgia
Division

Richard H. Woodward, Jr. 48 November 1994 (1)Senior Vice
Senior Vice President - President -
Business Development Corporate Services

Michael D. Hutchins 44 November 1994 (1)Vice President -
Vice President - Operations Engineering
and Engineering

Clayton H. Preble 48 November 1994 (1)Vice President -
Vice President - Marketing and Corporate Planning
Sales (2)Director -
Corporate Planning
(3)Division Manager -
Northeast Georgia
(4)Manager - Gwinnett

J. Michael Riley 44 November 1994 (1)Vice President and
Vice President - Finance and Controller
Accounting (2)Controller

There are no family relationships among the executive officers.

All officers generally are elected annually by the Board of Directors at the
first meeting following the Annual Meeting of Shareholders in February.

Part II

Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters

Information relating to the market for holders of and dividends on the
Company's common stock is set forth under the caption "Shareholder
Information" on page 46 of the Company's 1995 Annual Report. Such information
is incorporated herein by reference. Portions of the 1995 Annual Report are
filed as Exhibit 13 to this report.

Item 6. Selected Financial Data

Selected financial data for the Company for each year of the five-year period
ended September 30, 1995 is set forth under the caption "Selected Financial
Data" on pages 42 and 43 of the Company's 1995 Annual Report referred to in
Item 5 above. Such five-year selected financial data is incorporated herein
by reference.

Item 7. Management's Discussion and Analysis of Results of Operations
and Financial Condition

A discussion of the Company's results of operations and financial condition
is set forth under the caption "Management's Discussion and Analysis of
Results of Operations and Financial Condition" on pages 22 through 27 of the
Company's 1995 Annual Report referred to in Item 5 above. Such discussion is
incorporated herein by reference.

Item 8. Financial Statements and Supplementary Data

The following financial statements of the Company, which are set forth on
pages 28 through 41 of the Company's 1995 Annual Report referred to in Item 5
above, are incorporated herein by reference:

Statements of Consolidated Income for the years ended September 30, 1995,
1994 and 1993.

Statements of Consolidated Cash Flows for the years ended September 30, 1995,
1994 and 1993.

Consolidated Balance Sheets as of September 30, 1995 and 1994.

Statements of Consolidated Common Stock Equity for the years ended September
30, 1995, 1994 and 1993.

Notes to Consolidated Financial Statements.

Independent Auditors' Report.

The supplementary financial information required by Item 302 of Regulation
S-K is set forth in Note 15 in Notes to Consolidated Financial Statements in
the Company's 1995 Annual Report to Shareholders.

The following supplemental data is submitted herewith:

Independent Auditors' Report on Financial Statement Schedule.

Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure

None

Part III
Item 10. Directors and Executive Officers of the Registrant

Information relating to nominees for director of the Company is set forth
under the caption "Election of Directors-Information Concerning Nominees" in
the Proxy Statement for the 1996 Annual Meeting of Shareholders. Such
information is incorporated herein by reference. The definitive Proxy
Statement will be filed with the Securities and Exchange Commission within
120 days after the Company's fiscal year end. Information relating to the
executive officers of the Company, pursuant to Instruction 3 of Item 401(b)
of Regulation S-K and General Instruction G(3) of Form 10-K, is set forth at
Part I, Item 4(A) of this report under the caption "Executive Officers of the
Registrant."

Item 11. Executive Compensation

Information relating to executive compensation is set forth under the caption
"Executive Compensation" in the Proxy Statement referred to in Item 10
above. Such information is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management

Information relating to ownership of common stock of the Company by certain
persons is set forth under the caption "Security Ownership of Management" in
the Proxy Statement referred to in Item 10 above. Such information is
incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions

Information relating to existing or proposed relationships or transactions
between the Company and any affiliate of the Company is set forth under the
caption "Compensation Committee Interlocks and Insider Participation" in the
Proxy Statement referred to in Item 10 above. Such information is
incorporated herein by reference.

Part IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a) Documents Filed as Part of This Report:

1. Financial Statements

Included under Item 8 are the following financial statements:

Statements of Consolidated Income for the Years Ended
September 30, 1995, 1994 and 1993.

Statements of Consolidated Cash Flows for the Years
Ended September 30, 1995, 1994 and 1993.

Consolidated Balance Sheets as of September 30, 1995 and 1994.

Statements of Consolidated Common Stock Equity for
the Years Ended September 30, 1995, 1994 and 1993.

Notes to Consolidated Financial Statements.

Independent Auditors' Report.

2. Supplemental Consolidated Financial Schedules for Each of the
Three Years in the Period Ended September 30, 1995:

Independent Auditors' Report.

II. - Valuation and Qualifying Account--Allowance for
Uncollectible Accounts.

Schedules other than those referred to above are omitted and are
not applicable or not required, or the required information
is shown in the financial statements or notes thereto.

3. Exhibits

Where an exhibit is filed by incorporation by reference to a
previously filed registration statement or report, such
registration statement or report is identified in parentheses.

3(a) - Charter of the Company, as amended through February 20, 1990
(Exhibit 3(a), Registration No. 33-52752).

3(b) - Articles of Amendment to the Articles of Incorporation (Charter)
of the Company filed on October 9, 1992, with the Secretary of State of the
State of Georgia (Exhibit 3(b), Form 10-K for the fiscal year ended September
30, 1992).

3(c) - Articles of Correction to the Charter of the Company filed on
October 16, 1992, with the Secretary of State of the State of Georgia
(Exhibit 3(c), Form 10-K for the fiscal year ended September 30, 1992).

3(d) - Articles of Amendment to the Articles of Incorporation (Charter)
of the Company filed on February 22, 1993, with the Secretary of State of the
State of Georgia (Exhibit 3, Form 10-Q for the quarter ended March 31, 1993).

3(e) - By-Laws of the Company, as amended through November 17, 1995.

4(a) - Indenture, dated as of December 1, 1989, between Atlanta Gas Light
Company and Bankers Trust Company, as Trustee (Exhibit 4(a), Registration No.
33-32274).

4(b) - First Supplemental Indenture, dated as of March 16, 1992, between
Atlanta Gas Light Company and NationsBank of Georgia, National Association,
as Successor Trustee, (Exhibit 4(a), Registration No. 33-46419).

10(a) - Executive Compensation Plans and Arrangements;

Atlanta Gas Light Company Long-Term Stock Incentive Plan of 1990, (Exhibit
10(ii), Form 10-K for the fiscal year ended September 30, 1991).

Atlanta Gas Light Company Nonqualified Savings Plan.

10(b) - Service Agreement under Rate Schedule GSS dated April 13, 1972,
between the Company and Transcontinental Gas Pipe Line Corporation (Exhibit
5(c), Registration No. 2-48297).

10(c) - Service Agreement under Rate Schedule LG-A, effective August 16,
1974, between the Company and Transcontinental Gas Pipe Line Corporation
(Exhibit 5(d), Registration No. 2-58971).

10(d) - Storage Transportation Agreement, dated June 1, 1979, between the
Company and Southern Natural Gas Company, (Exhibit 5(n), Registration No.
2-65487).

10(e) - Letter of Intent dated September 18, 1987, between the Company and
Jupiter Industries, Inc. relating to the purchase by the Company of the
assets of the Chattanooga Gas Company Division of Jupiter Industries, Inc.
(Exhibit 10(p), Form 10-K for the fiscal year ended September 30, 1987).

10(f) - Agreement for the Purchase of Assets dated April 5, 1988, between
the Company and Jupiter Industries, Inc., (Exhibit 10(q), Form 10-K for the
fiscal year ended September 30, 1988).

10(g) - 100 Day Storage Service Agreement, dated June 1, 1979, between the
Company and South Georgia Natural Gas Company, (Exhibit 10(r), Form 10-K for
the fiscal year ended September 30, 1989).

10(h) - Service Agreement under Rate Schedule LSS, dated October 31, 1984,
between the Company and Transcontinental Gas Pipe Line Corporation, (Exhibit
10(s), Form 10-K for the fiscal year ended September 30, 1989).

10(i) - Letter from Transcontinental Gas Pipe Line Corporation, dated
April 19, 1988, relating to commencement of storage service under Rate
Schedule SS-1, (Exhibit 10(v), Form 10-K for the fiscal year ended September
30, 1989).

10(j) - Storage Transportation Agreement, dated June 1, 1979, between the
Company and South Georgia Natural Gas Company, (Exhibit 10(v), Form 10-K for
the fiscal year ended September 30, 1990).

10(k) - Firm Seasonal Transportation Agreement, dated June 29, 1990,
between the Company and Transcontinental Gas Pipe Line Corporation, (Exhibit
10(bb), Form 10-K for the fiscal year ended September 30, 1990).

10(l) - Service Agreement under Rate Schedule WSS, dated June 1, 1990,
between the Company and Transcontinental Gas Pipe Line Corporation, (Exhibit
10(cc), Form 10-K for the fiscal year ended September 30, 1990).

10(m) - Limited-Term Transportation Agreement Contract # A970 dated April
1, 1988, between the Company and CNG Transmission Corporation, (Exhibit
10(bb), Form 10-K for the fiscal year ended September 30, 1991).

10(n) - Service Agreement System Contract #.2271 under Rate Schedule FT,
dated August 1, 1991, between the Company and Transcontinental Gas Pipe Line
Corporation, (Exhibit 10(dd), Form 10-K for the fiscal year ended September
30, 1991).

10(o) - Service Agreement System Contract #.4984 dated August 1, 1991,
between the Company and Transcontinental Gas Pipe Line Corporation, (Exhibit
10(ee), Form 10-K for the fiscal year ended September 30, 1991).

10(p) - Service Agreement Contract #830810 under Rate Schedule FT, dated
March 1, 1992, between the Company and South Georgia Natural Gas Company
(Exhibit 10(aa), Form 10-K for the fiscal year ended September 30, 1992).

10(q) - Firm Gas Transportation Contract #3699 under Rate Schedule FT,
dated February 1, 1992, between the Company and Transcontinental Gas Pipe
Line Corporation (Exhibit 10(dd), Form 10-K for the fiscal year ended
September 30, 1992).

10(r) - Firm Gas Transportation Agreement under Rate Schedule FT-1, dated
July 1, 1992, between the Company and East Tennessee Natural Gas Company
(Exhibit 10(ff), Form 10-K for the fiscal year ended September 30, 1992).

10(s) - Service Agreement Applicable to the Storage of Natural Gas under
Rate Schedule GSS, dated October 25, 1993, between the Company and CNG
Transmission Corporation (Exhibit 10(y), Form 10-K for the fiscal year ended
September 30, 1993).

10(t) - Service Agreement Applicable to the Storage of Natural Gas under
Rate Schedule GSS, dated September, 1993, between Chattanooga Gas Company and
CNG Transmission Corporation (Exhibit 10(z), Form 10-K for the fiscal year
ended September 30, 1993).

10(u) - Gas Storage Contract #2031 under Rate Schedule FS, dated September
1, 1993, between the Company and Tennessee Gas Pipeline Company (Exhibit
10(aa), Form 10-K for the fiscal year ended September 30, 1993).

10(v) - Firm Seasonal Transportation Agreement, dated February 1, 1992,
between the Company and Transcontinental Gas Pipe Line Corporation amending
Exhibit 10(bb), Form 10-K for the fiscal year ended September 30, 1990
(Exhibit 10(cc), Form 10-K for the fiscal year ended September 30, 1993).

10(w) - Service Agreement under Rate Schedule SS-1, dated April 1, 1988,
between the Company and Transcontinental Gas Pipe Line Corporation (Exhibit
10(z), Form 10-K for the fiscal year ended September 30, 1994).

10(x) - Firm Gas Transportation Agreement #5049 under Rate Schedule FT-A,
dated November 1, 1993, between the Company and Tennessee Gas Pipeline
Company (Exhibit 10(aa), Form 10-K for the fiscal year ended September 30,
1994).

10(y) - Firm Gas Transportation Agreement #5051 under Rate Schedule FT-A,
dated November 1, 1993, between Chattanooga Gas Company and Tennessee Gas
Pipeline Company (Exhibit 10(bb), Form 10-K for the fiscal year ended
September 30, 1994).

10(z) - Gas Storage Contract #3998 under Rate Schedule FS, dated November
1, 1993, between the Company and Tennessee Gas Pipeline Company (Exhibit
10(cc), Form 10-K for the fiscal year ended September 30, 1994).

10(aa) - Gas Storage Contract #3999 under Rate Schedule FS, dated
November 1, 1993, between Chattanooga Gas Company and Tennessee Gas Pipeline
Company (Exhibit 10(dd), Form 10-K for the fiscal year ended September 30,
1994).

10(bb) - Gas Storage Contract #3923 under Rate Schedule FS, dated
November 1, 1993, between the Company and Tennessee Gas Pipeline Company
(Exhibit 10(ee), Form 10-K for the fiscal year ended September 30, 1994).

10(cc) - Gas Storage Contract #3947 under Rate Schedule FS, dated
November 1, 1993, between Chattanooga Gas Company and Tennessee Gas Pipeline
Company (Exhibit 10(ff), Form 10-K for the fiscal year ended September 30,
1994).

10(dd) - Gas Storage Contract #2027 under Rate Schedule FS, dated
September 1, 1993, between Chattanooga Gas Company and Tennessee Gas Pipeline
Company (Exhibit 10(gg), Form 10-K for the fiscal year ended September 30,
1994).

10(ee) - Service Agreement #902470 under Rate Schedule FT, dated
September 1, 1994, between the Company and Southern Natural Gas Company
(Exhibit 10(hh), Form 10-K for the fiscal year ended September 30, 1994).

10(ff) - Service Agreement #904460 under Rate Schedule FT, dated
November 1, 1994, between the Company and Southern Natural Gas Company
(Exhibit 10(ii), Form 10-K for the fiscal year ended September 30, 1994).

10(gg) - Service Agreement #904480 under Rate Schedule FT, dated
November 1, 1994, between the Company and Southern Natural Gas Company
(Exhibit 10(jj), Form 10-K for the fiscal year ended September 30, 1994).

10(hh) - Service Agreement #904461 under Rate Schedule FT-NN, dated
November 1, 1994, between the Company and Southern Natural Gas Company
(Exhibit 10(kk), Form 10-K for the fiscal year ended September 30, 1994).

10(ii) - Service Agreement #904481 under Rate Schedule FT-NN, dated
November 1, 1994, between the Company and Southern Natural Gas Company
(Exhibit 10(ll), Form 10-K for the fiscal year ended September 30, 1994).

10(jj) - Service Agreement #S20140 under Rate Schedule CSS, dated
November 1, 1994, between the Company and Southern Natural Gas Company
(Exhibit 10(mm), Form 10-K for the fiscal year ended September 30, 1994).

10(kk) - Service Agreement #S20150 under Rate Schedule CSS, dated
November 1, 1994, between the Company and Southern Natural Gas Company
(Exhibit 10(nn), Form 10-K for the fiscal year ended September 30, 1994).

10(ll) - Service Agreement #904470 under Rate Schedule FT, dated
November 1, 1994, between Chattanooga Gas Company and Southern Natural Gas
Company (Exhibit 10(oo), Form 10-K for the fiscal year ended September 30,
1994).

10(mm) - Service Agreement #904471 under Rate Schedule FT-NN, dated
November 1, 1994, between Chattanooga Gas Company and Southern Natural Gas
Company (Exhibit 10(pp), Form 10-K for the fiscal year ended September 30,
1994).

10(nn) - Service Agreement #S20130 under Rate Schedule CSS, dated
November 1, 1994, between Chattanooga Gas Company and Southern Natural Gas
Company (Exhibit 10(qq), Form 10-K for the fiscal year ended September 30,
1994).

10(oo) - Firm Storage (FS) Agreement, dated November 1, 1994, between
the Company and ANR Storage Company (Exhibit 10(a), Form 10-Q for the quarter
ended March 31, 1995).

10(pp) - Firm Storage (FS) Agreement, dated November 1, 1994, between
the Company and ANR Storage Company (Exhibit 10(b), Form 10-Q for the quarter
ended March 31, 1995).

10(qq) - Firm Transportation Agreement, dated March 1, 1995, between
the Company and Southern Natural Gas Company amending Exhibits 10(jj),
10(ll) and 10(mm), Form 10-K for the fiscal year ended September 30, 1994
(Exhibit 10(c), Form 10-Q for the quarter ended March 31, 1995).

10(rr) - Firm Transportation Agreement, dated March 1, 1995, between
the Company and Southern Natural Gas Company amending Exhibits 10(hh),
10(ii), 10(kk) and 10(nn), Form 10-K for the fiscal year ended September 30,
1994 (Exhibit 10(d), Form 10-Q for the quarter ended March 31, 1995).

10(ss) - Firm Transportation Agreement, dated March 1, 1995, between
Chattanooga Gas Company and Southern Natural Gas Company amending Exhibits
10(oo), 10(pp) and 10(qq), Form 10-K for the fiscal year ended September 30,
1994 (Exhibit 10(a), Form 10-Q for the quarter ended June 30, 1995).

10(tt) - Firm Transportation Agreement, dated June 1, 1995, between
the Company and Southern Natural Gas Company amending Exhibit 10(ii), Form
10-K for the fiscal year ended September 30, 1994.

10(uu) - Firm Storage Agreement, effective December 1, 1994, between
Chattanooga Gas Company and Tennessee Gas Pipeline Company amending Exhibit
10(ff), Form 10-K for the fiscal year ended September 30, 1994.

10(vv) - Firm Storage Agreement, effective July 1, 1995, between
Chattanooga Gas Company and Tennessee Gas Pipeline Company amending Exhibit
10(ff), Form 10-K for the fiscal year ended September 30, 1994.

10(ww) - Firm Storage Agreement, effective July 1, 1995, between
Chattanooga Gas Company and Tennessee Gas Pipeline Company amending Exhibit
10(dd), Form 10-K for the fiscal year ended September 30, 1994.

10(xx) - Firm Transportation Agreement, dated September 26, 1994,
between the Company and South Georgia Natural Gas Company amending Exhibit
10(s), Form 10-K for the fiscal year ended September 30, 1994.

10(yy) - Firm Storage Agreement, effective July 1, 1995, between the
Company and Tennessee Gas Pipeline Company amending Exhibit 10(ee), Form 10-K
for the fiscal year ended September 30, 1994.

10(zz) - Firm Storage Agreement, effective July 1, 1995, between the
Company and Tennessee Gas Pipeline Company amending Exhibit 10(cc), Form 10-K
for the fiscal year ended September 30, 1994.

13 - Portions of the 1995 Annual Report to Shareholders incorporated herein
by reference.

21 - Subsidiaries of the Registrant.

23 - Independent Auditors' Consent.

24 - Powers of Attorney.

27 - Financial Data Schedule.

(b) Reports on Form 8-K

No Form 8-K was filed during the last quarter of the year ended September 30,
1995.

The remainder of this page was intentionally left blank.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.

ATLANTA GAS LIGHT COMPANY
(Registrant)

By/s/ David R. Jones December 22, 1995
David R. Jones Date
President and
Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

Signature Title Date

/s/ David R. Jones
David R. Jones President and Chief December 22, 1995
Executive Officer
(Principal Executive
Officer) and Director

/s/ Robert L. Goocher Executive Vice President - December 22, 1995
Robert L. Goocher Business Support and
Chief Financial Officer (Principal
Financial Officer)

/s/ J. Michael Riley Vice President - December 22, 1995
J. Michael Riley Finance and Accounting
(Principal Accounting Officer)

*Frank Barron, Jr. Director December 22, 1995
Frank Barron, Jr.

*W. Waldo Bradley Director December 22, 1995
W. Waldo Bradley

Signature Title Date

*Otis A. Brumby, Jr.
Otis A. Brumby, Jr. Director December 22, 1995

*L. L. Gellerstedt, Jr.
L. L. Gellerstedt, Jr. Director December 22, 1995

Kenneth D. Lewis Director

*Albert G. Norman, Jr.
Albert G. Norman, Jr. Director December 22, 1995

*D. Raymond Riddle
D. Raymond Riddle Director December 22, 1995

*Betty L. Siegel
Betty L. Siegel Director December 22, 1995

*Ben J. Tarbutton, Jr.
Ben J. Tarbutton, Jr. Director December 22, 1995

*Charles McKenzie Taylor
Charles McKenzie Taylor Director December 22, 1995

*Felker W. Ward, Jr.
Felker W. Ward, Jr. Director December 22, 1995

*By: /s/ Robert L. Goocher
Robert L. Goocher
(Attorney-in-Fact)

INDEPENDENT AUDITORS' REPORT

To the Shareholders and Board of Directors
of Atlanta Gas Light Company:

We have audited the consolidated balance sheets of Atlanta Gas Light Company
and subsidiaries as of September 30, 1995 and 1994, and the related
statements of consolidated income, common stock equity, and cash flows for
each of the three years in the period ended September 30, 1995, and have
issued our report thereon dated November 27, 1995; such financial statements
and report are included in your 1995 Annual Report to Shareholders and are
incorporated herein by reference. Our audits also included the financial
statement schedule of Atlanta Gas Light Company and subsidiaries, listed in
Item 14. This financial statement schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion based on
our audits. In our opinion, such financial statement schedule, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.

/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP

Atlanta, Georgia
November 27, 1995

SCHEDULE II

ATLANTA GAS LIGHT COMPANY AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNT
ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
FOR THE YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
(IN THOUSANDS)

1995 1994 1993

Balance, beginning of year . . . . . . $ 2,755 $ 1,854 $ 3,327
Additions:
Provisions charged to income . . . . 5,282 7,506 6,370
Recovery of accounts
previously written off
as uncollectible . . . . . . . . . 6,622 7,129 4,415
-------- -------- --------
Total . . . . . . . . . . . . . . 14,659 16,489 14,112

Deduction:
Accounts written off
as uncollectible . . . . . . . . . 10,267 13,734 12,258
-------- -------- --------
Balance, end of year . . . . . . . . . $ 4,392 $ 2,755 $ 1,854
======== ======== ========

INDEX TO EXHIBITS

Exhibit
Number Description

3(a) - Charter of the Company, as amended through February 20, 1990 (Exhibit
3(a), Registration No. 33-52752).

3(b) - Articles of Amendment to the Articles of Incorporation (Charter) of
the Company filed on October 9, 1992, with the Secretary of State of the
State of Georgia (Exhibit 3(b), Form 10-K for the fiscal year ended September
30, 1992).

3(c) - Articles of Correction to the Charter of the Company filed on October
16, 1992, with the Secretary of State of the State of Georgia (Exhibit 3(c),
Form 10-K for the fiscal year ended September 30, 1992).

3(d) - Articles of Amendment to the Articles of Incorporation (Charter) of
the Company filed on February 22, 1993, with the Secretary of State of the
State of Georgia (Exhibit 3, Form 10-Q for the quarter ended March 31, 1993).

3(e) - By-Laws of the Company, as amended through November 17, 1995.

4(a) - Indenture, dated as of December 1, 1989, between Atlanta Gas Light
Company and Bankers Trust Company, as Trustee (Exhibit 4(a), Registration No.
33-32274).

Exhibit
Number Description

10(a) - Executive Compensation Plans and Arrangements;

Atlanta Gas Light Company Long-Term Stock Incentive Plan of 1990, (Exhibit
10(ii), Form 10-K for the fiscal year ended September 30, 1991).

Atlanta Gas Light Company Nonqualified Savings Plan.

10(b) - Service Agreement under Rate Schedule GSS dated April 13, 1972,
between the Company and Transcontinental Gas Pipe Line Corporation (Exhibit
5(c), Registration No. 2-48297).

10(c) - Service Agreement under Rate Schedule LG-A, effective August 16,
1974, between the Company and Transcontinental Gas Pipe Line Corporation
(Exhibit 5(d), Registration No. 2-58971).

10(d) - Storage Transportation Agreement, dated June 1, 1979, between the
Company and Southern Natural Gas Company, (Exhibit 5(n), Registration No.
2-65487).

10(f) - Agreement for the Purchase of Assets dated April 5, 1988, between the
Company and Jupiter Industries, Inc., (Exhibit 10(q), Form 10-K for the
fiscal year ended September 30, 1988).

10(g) - 100 Day Storage Service Agreement, dated June 1, 1979, between the
Company and South Georgia Natural Gas Company, (Exhibit 10(r), Form 10-K for
the fiscal year ended September 30, 1989).

Exhibit
Number Description

10(i) - Letter from Transcontinental Gas Pipe Line Corporation, dated April
19, 1988, relating to commencement of storage service under Rate Schedule
SS-1, (Exhibit 10(v), Form 10-K for the fiscal year ended September 30,
1989).

10(j) -Storage Transportation Agreement, dated June 1, 1979, between the
Company and South Georgia Natural Gas Company, (Exhibit 10(v), Form 10-K for
the fiscal year ended September 30, 1990).

10(k) - Firm Seasonal Transportation Agreement, dated June 29, 1990, between
the Company and Transcontinental Gas Pipe Line Corporation, (Exhibit 10(bb),
Form 10-K for the fiscal year ended September 30, 1990).

10(m) - Limited-Term Transportation Agreement Contract # A970 dated April 1,
1988, between the Company and CNG Transmission Corporation, (Exhibit 10(bb),
Form 10-K for the fiscal year ended September 30, 1991).

Exhibit
Number Description

10(q) - Firm Gas Transportation Contract #3699 under Rate Schedule FT, dated
February 1, 1992, between the Company and Transcontinental Gas Pipe Line
Corporation (Exhibit 10(dd), Form 10-K for the fiscal year ended September
30, 1992).

10(s) - Service Agreement Applicable to the Storage of Natural Gas under Rate
Schedule GSS, dated October 25, 1993, between the Company and CNG
Transmission Corporation (Exhibit 10(y), Form 10-K for the fiscal year ended
September 30, 1993).

10(t) - Service Agreement Applicable to the Storage of Natural Gas under Rate
Schedule GSS, dated September, 1993, between Chattanooga Gas Company and CNG
Transmission Corporation (Exhibit 10(z), Form 10-K for the fiscal year ended
September 30, 1993).

10(u) - Gas Storage Contract #2031 under Rate Schedule FS, dated September 1,
1993, between the Company and Tennessee Gas Pipeline Company (Exhibit
10(aa), Form 10-K for the fiscal year ended September 30, 1993).

Exhibit
Number Description

10(z) - Gas Storage Contract #3998 under Rate Schedule FS, dated November 1,
1993, between the Company and Tennessee Gas Pipeline Company (Exhibit 10(cc),
Form 10-K for the fiscal year ended September 30, 1994).

10(aa) - Gas Storage Contract #3999 under Rate Schedule FS, dated November 1,
1993, between Chattanooga Gas Company and Tennessee Gas Pipeline Company
(Exhibit 10(dd), Form 10-K for the fiscal year ended September 30, 1994).

10(bb) - Gas Storage Contract #3923 under Rate Schedule FS, dated November 1,
1993, between the Company and Tennessee Gas Pipeline Company (Exhibit 10(ee),
Form 10-K for the fiscal year ended September 30, 1994).

10(cc) - Gas Storage Contract #3947 under Rate Schedule FS, dated November 1,
1993, between Chattanooga Gas Company and Tennessee Gas Pipeline Company
(Exhibit 10(ff), Form 10-K for the fiscal year ended September 30, 1994).

10(dd) - Gas Storage Contract #2027 under Rate Schedule FS, dated September
1, 1993, between Chattanooga Gas Company and Tennessee Gas Pipeline Company
(Exhibit 10(gg), Form 10-K for the fiscal year ended September 30, 1994).

10(ee) - Service Agreement #902470 under Rate Schedule FT, dated September 1,
1994, between the Company and Southern Natural Gas Company (Exhibit 10(hh),
Form 10-K for the fiscal year ended September 30, 1994).

Exhibit
Number Description

10(ff) - Service Agreement #904460 under Rate Schedule FT, dated November 1,
1994, between the Company and Southern Natural Gas Company (Exhibit 10(ii),
Form 10-K for the fiscal year ended September 30, 1994).

10(gg) - Service Agreement #904480 under Rate Schedule FT, dated November 1,
1994, between the Company and Southern Natural Gas Company (Exhibit 10(jj),
Form 10-K for the fiscal year ended September 30, 1994).

10(hh) - Service Agreement #904461 under Rate Schedule FT-NN, dated November
1, 1994, between the Company and Southern Natural Gas Company (Exhibit
10(kk), Form 10-K for the fiscal year ended September 30, 1994).

10(ii) - Service Agreement #904481 under Rate Schedule FT-NN, dated November
1, 1994, between the Company and Southern Natural Gas Company (Exhibit
10(ll), Form 10-K for the fiscal year ended September 30, 1994).

10(jj) - Service Agreement #S20140 under Rate Schedule CSS, dated November 1,
1994, between the Company and Southern Natural Gas Company (Exhibit 10(mm),
Form 10-K for the fiscal year ended September 30, 1994).

10(kk) - Service Agreement #S20150 under Rate Schedule CSS, dated November 1,
1994, between the Company and Southern Natural Gas Company (Exhibit 10(nn),
Form 10-K for the fiscal year ended September 30, 1994).

10(ll) - Service Agreement #904470 under Rate Schedule FT, dated November 1,
1994, between Chattanooga Gas Company and Southern Natural Gas Company
(Exhibit 10(oo), Form 10-K for the fiscal year ended September 30, 1994).

10(mm) - Service Agreement #904471 under Rate Schedule FT-NN, dated November
1, 1994, between Chattanooga Gas Company and Southern Natural Gas Company
(Exhibit 10(pp), Form 10-K for the fiscal year ended September 30, 1994).

Exhibit
Number Description

10(nn) - Service Agreement #S20130 under Rate Schedule CSS, dated November 1,
1994, between Chattanooga Gas Company and Southern Natural Gas Company
(Exhibit 10(qq), Form 10-K for the fiscal year ended September 30, 1994).

10(oo) - Firm Storage (FS) Agreement, dated November 1, 1994, between the
Company and ANR Storage Company (Exhibit 10(a), Form 10-Q for the quarter
ended March 31, 1995).

10(pp) - Firm Storage (FS) Agreement, dated November 1, 1994, between the
Company and ANR Storage Company (Exhibit 10(b), Form 10-Q for the quarter
ended March 31, 1995).

10(qq) - Firm Transportation Agreement, dated March 1, 1995, between the
Company and Southern Natural Gas Company amending Exhibits 10(jj), 10(ll)
and 10(mm), Form 10-K for the fiscal year ended September 30, 1994 (Exhibit
10(c), Form 10-Q for the quarter ended March 31, 1995).

10(rr) - Firm Transportation Agreement, dated March 1, 1995, between the
Company and Southern Natural Gas Company amending Exhibits 10(hh), 10(ii),
10(kk) and 10(nn), Form 10-K for the fiscal year ended September 30, 1994
(Exhibit 10(d), Form 10-Q for the quarter ended March 31, 1995).

10(tt) - Firm Transportation Agreement, dated June 1, 1995, between the
Company and Southern Natural Gas Company amending Exhibit 10(ii), Form 10-K
for the fiscal year ended September 30, 1994.

Exhibit
Number Description

10(vv) - Firm Storage Agreement, effective July 1, 1995, between Chattanooga
Gas Company and Tennessee Gas Pipeline Company amending Exhibit 10(ff), Form
10-K for the fiscal year ended September 30, 1994.

10(ww) - Firm Storage Agreement, effective July 1, 1995, between Chattanooga
Gas Company and Tennessee Gas Pipeline Company amending Exhibit 10(dd), Form
10-K for the fiscal year ended September 30, 1994.

10(xx) - Firm Transportation Agreement, dated September 26, 1994, between the
Company and South Georgia Natural Gas Company amending Exhibit 10(s), Form
10-K for the fiscal year ended September 30, 1994.

10(yy) - Firm Storage Agreement, effective July 1, 1995, between the Company
and Tennessee Gas Pipeline Company amending Exhibit 10(ee), Form 10-K for the
fiscal year ended September 30, 1994.

10(zz) - Firm Storage Agreement, effective July 1, 1995, between the Company
and Tennessee Gas Pipeline Company amending Exhibit 10(cc), Form 10-K for the
fiscal year ended September 30, 1994.

13 - Portions of the 1995 Annual Report to Shareholders incorporated herein
by reference.

21 - Subsidiaries of the Registrant.

23 - Independent Auditors' Consent.

24 - Powers of Attorney.

27 - Financial Data Schedule.