EXHIBIT 21-1



                          PG ENERGY INC. AND SUBSIDIARY

                         Subsidiaries of the Registrant


         The  following  are  subsidiaries  of  the  Registrant.   Their  voting
securities  are  owned  100% by the  Registrant  and  they are  incorporated  in
Pennsylvania.


                  Penn Gas Development Co. (1)

                  Honesdale Gas Company (2)

     (1) A subsidiary of PG Energy Inc. accounted for on the equity method which
has not been consolidated since it is insignificant.

     (2) A  subsidiary  of PG Energy Inc.  acquired on February  14,  1997,  and
included in the consolidation of PG Energy Inc.