NEWS RELEASE
LACLEDE GAS
- -------------------------------------------------------------------------------
                                         720 OLIVE STREET, ST. LOUIS, MO 63101

                                              CONTACT: Richard N. Hargraves
                                                       (314) 342-0652


FOR IMMEDIATE RELEASE


LACLEDE GAS GOES TO COURT TO CHALLENGE MOPSC'S DECISION TO END LACLEDE'S
HIGHLY SUCCESSFUL GSIP

         ST. LOUIS, MO, February 20, 2002 -- After nearly a five-month
delay, the Missouri Public Service Commission yesterday voted to deny
Laclede Gas a rehearing of the Commission's September 20, 2001, decision to
allow Laclede's highly successful Gas Supply Incentive Program (GSIP) to
expire.
         In response, Laclede Gas today filed suit in Cole County Circuit
Court seeking judicial review of the Commission's action.
         Yesterday's decision to deny rehearing came on a 3-1 vote of the
five-member Commission. However, Commissioner Connie Murray, who previously
supported continuation of Laclede's program, wrote that she participated in
the majority's decision because such a ruling "is a necessary prerequisite
for Laclede's exercise of its right to appeal" and because further delay
would be "inexcusable."
         The Commission's September decision to allow Laclede's GSIP to
expire was an abrupt reversal of previous Commission actions in which
Laclede's GSIP had been approved on three separate occasions, twice
unanimously and, on a third occasion, by a

                                     1




4-1 vote. Further, the Commission's own task force on gas pricing mechanisms
has endorsed the use of incentive-based programs in the gas cost area.
         During the five years it was in operation, Laclede's GSIP generated
more than $164 million. These savings came from new, innovative gas supply
arrangements developed by Laclede, many of which involved the company
assuming increased risk. The incentive structure rewarded Laclede for its
cost-savings effectiveness by permitting it to retain for its shareholders a
portion of the total gas cost savings it achieved. However, the lion's share
of the benefits -- $129 million, or 78% -- went to reduce customer costs.
         "The benefits generated by this program overwhelmingly come from
out-of-state natural gas producers and marketers, which is precisely why it
is the kind of program that should be supported by any state commission,"
said Douglas H. Yaeger, Laclede's Chairman, President and Chief Executive
Officer.
         "Laclede is seeking judicial review of the Public Service
Commission's action because the company has an obligation to its customers
and shareholders to pursue all available options to retain this
incentive-based method of holding down gas costs within the current
competitive national supply system," Yaeger said.
         Incentive regulation provisions such as Laclede's GSIP have, in the
past, enabled Missouri utilities to operate in the changing national energy
marketplace without deregulating the traditional utility service provided to
Missouri customers. "So far, no one has shown how further deregulating
natural gas supply benefits our customers -- particularly our residential
customers. Some states that have done it wish they could undo it," Yaeger
said. "Incentive-based programs such as ours provide the best of both
worlds,


                                     2




allowing utilities to be innovative and save customers money while
maintaining state regulatory control. Eliminating such a program is not
beneficial to anyone."
         Laclede Gas is a subsidiary of The Laclede Group (NYSE: LG),
providing natural gas service to more than 630,000 residential, commercial
and industrial customers in the St. Louis area and southeastern Missouri.

                                    # # #



                                     3