SOUTHERN UNION COMPANY AND FALL RIVER GAS COMPANY
                 ANNOUNCE MERGER AGREEMENT


Austin, Texas (Oct. 5, 1999) - Southern Union Company (NYSE:
SUG) and Fall River Gas Company (ASE:FAL) today announced their
boards of directors have unanimously approved a definitive merger
agreement.

The agreement calls for Southern Union to acquire Fall River Gas
in a transaction valued at approximately $75 million, including
assumption of debt.  This transaction follows the announcement of
Southern Union's merger agreement with Pennsylvania Enterprises,
Inc. (NYSE:  PNT), which is currently in process.  This agreement
further strengthens Southern Union's balance sheet while
expanding our competitive position in the attractive northeast
energy market.

Under the terms of the agreement, Fall River Gas shareholders
will receive $23.50 per Fall River Gas share in Southern Union
common stock or cash.  Fall River Gas shareholders can elect to
receive Southern Union common stock, cash, or a combination of
stock and cash, subject to pro-ration and the adjustment formula
(described below).

The agreement requires that at least 50 percent of the common
stock of Fall River Gas be converted into Southern Union common
stock and up to the remaining 50 percent of Fall River Gas shares
be converted into cash.  The exchange ratio for the stock portion
of the consideration is subject to an adjustment formula based on
the average trading price of Southern Union common stock during a
ten-trading-day period ending three full trading days before the
closing date of the merger.  If Southern Union's average stock
price per share for the adjustment period is either lower than
$16.875 or higher than $19.6875 the portion of the purchase price
payable in stock would be determined based upon a fixed exchange
ratio calculated at such prices.

The transaction is intended to be tax-free to the Fall River Gas
shareholders to the extent they receive Southern Union common
stock.

Headquartered in Fall River, Massachusetts, Fall River Gas serves
approximately 48,000 customers in the city of Fall River and the
towns of Somerset, Swansea and Westport, all located in
southeastern Massachusetts.

Upon completion of the two mergers, Southern Union will have a
market capitalization of approximately $1 billion and serve
nearly 1.3 million gas and electric customers in Massachusetts,
Pennsylvania, Texas, Missouri and Florida.

According to Southern Union President Peter Kelley, "Customers
will immediately experience the benefits of being part of a
larger company as Southern Union brings technology into the
workplace to enhance customer service.   As this new era of
competition progresses it will be customer service that
differentiates the competitors.  Southern Union has adopted
existing technology and is developing new products that will
further enhance service and efficiencies."

Fall River Gas Chairman and CEO Bradford Faxon stated, "This is
an opportunity for our shareholders to realize the full value of
their investment in Fall River Gas and have the opportunity to
join a progressive international energy company with a proven
record in building shareholder value."

Fall River Gas will operate as a division of Southern Union and
according to Kelley, no layoffs are anticipated as a result of
the transaction.

The transaction will require the approval of the holders of
two-thirds of outstanding Fall River Gas shares, the
Massachusetts Department of Telecommunications and Energy, the
Pennsylvania Public Utility Commission as well as regulators in
Missouri, where Southern Union currently has operations.  Holders
of 25 percent of outstanding Fall River Gas shares have committed
their support for the merger into Southern Union.

This release and other Company reports and statements issued or
made from time to time contain certain "forward-looking
statements" concerning projected future financial performance,
expected plans or future operations.  Southern Union Company
cautions that actual results and developments may differ
materially from such projections or expectations.  Investors
should be aware of important factors that could cause actual
results to differ materially from the forward-looking projections
or expectations.  These factors include, but are not limited to:
weather conditions in the Company's service territories; cost of
gas; regulatory and court decisions; the receipt of timely and
adequate rate relief; the achievement of operating efficiencies
and the purchase and implementation of new technologies for
attaining such efficiencies; impact of relations with labor
unions of bargaining-unit employees; impact of any Year 2000
disruption; and the effect of strategic initiatives on earnings
and cash flow.  Most of these factors are difficult to accurately
predict and are generally beyond the control of the Company.

For Further Information:
Southern Union Company
George Yankowski
Treasurer and Director of Investor Relations
(512)  370-8305

or:

Fall River Gas Company
Peter H. Thanas
Senior Vice President and Treasurer
(508) 689-1142