Folks this is another long one. I had to re-format a lot of it since it was NOT cut/paste friendly and I have NO idea about the success of all of teh tables so::::>

ps NB in teh RISKS section, they are developing a contingency plan for the contingency plan ah and this is NOT the dept of redundancy redundancy department!!

For all of the following companies:

CONSOLIDATED NATURAL GAS COMPANY :Pittsburgh, Pennsylvania : CNG COAL COMPANY : CNG PRODUCING COMPANY : CNG PIPELINE COMPANY : CNG RESEARCH COMPANY : CNG STORAGE SERVICE COMPANY : MASTERCNG ENERGY SERVICES CORPORATION : CNG POWER COMPANY : CNG TRANSMISSION CORPORATION : CNG PRODUCTS AND SERVICES, INC. : CNG MARKET CENTER SERVICES, INC. : CNG FINANCIAL SERVICES, INC. : CONSOLIDATED NATURAL GAS SERVICE : Consolidated System LNG COMPANY : HOPE GAS, INC. : THE EAST OHIO GAS COMPANY : THE PEOPLES NATURAL GAS COMPANY : VIRGINIA NATURAL GAS INC. : :

INFORMATION YEAR 2000 TECHNOLOGY ISSUE Similar to all business entities, the Company will be impacted by the inability of some computer application software programs to distinguish between the year1900 and 2000 due to a commonly-used programming convention. In the early 1990s, the Company identified business systems in need of technology updates to successfully adapt to changes in the business climate and the emerging competitive marketplace. These changes required the Company to move toward common, integrated systems and computing platforms. Accordingly, many systems representing older technology, which were not year2000 ready, were targeted for replacement. This plan is being executed through major initiatives such as a company-wide implementation of Oracle Financial Applications, the development of a new revenue and customer information system for the distribution subsidiaries called "CAMP," and the development and implementation of applications for gas control management and asset and facilities mapping. Through these initiatives over 75 application systems, including associated technical infrastructure, are being replaced. In 1997, the Company formalized its approach to year 2000 issues with the creation of a Year 2000 Project Office (Project Office) at the corporate level to coordinate company-wide year 2000 activities. All of the Company's operating subsidiaries are participating in this effort under the direction of the Project Office. The Company is addressing year 2000 issues via a systematic methodology that mitigates risk and incorporates a thorough due diligence process. This strategy recognizes that there is no standardized or sanctioned definition of "year 2000 compliance" as its meaning varies broadly depending on the industry, component, vendor, and/or device. The Company's strategy prioritizes the critical areas of the business to eliminate any potential impact on safety, and to mitigate or eliminate any adverse effect on revenues, assets, customer service and the environment that may result from the date change event. PROJECT DESCRIPTION AND ACTIVITIES The major areas of focus of the Company's year 2000 efforts include application systems, process control components, technical infrastructure, physical infrastructure, and business partner and vendor relationships. These project areas are summarized below: APPLICATION SYSTEMS. Application systems encompass all automated systems, including those developed internally and those purchased from vendors. These systems include traditional business applications, as well as operations and engineering applications. PROCESS CONTROL COMPONENTS (EMBEDDED TECHNOLOGY). Process control devices automate certain production, transportation and delivery functions in connection with natural gas, oil and liquids. These devices, such as flow computers and pressure regulators, generally include embedded computer technology. TECHNICAL INFRASTRUCTURE. This category represents the underlying technical architecture which supports the Company's application systems, e-mail, and similar infrastructure. This infrastructure includes mainframe hardware and software, application servers, local and wide area networks, desktop personal computers and telecommunications. PHYSICAL INFRASTRUCTURE. This category represents the Company's physical plant, including office buildings. Building infrastructure such as elevators, HVAC systems, security and fire alarm systems are examples of components included in this category. BUSINESS PARTNER AND VENDOR RELATIONSHIPS. This area involves analysis of critical business partner and vendor relationships and third party commitment to addressing year 2000 issues via discussion, contract reviews and additional detailed assessment as considered necessary. For each of the areas described above, the Company employs a five-phase process methodology as follows: (1) INVENTORY: In this phase, the Company compiles comprehensive inventories of each of the major project areas. (2) ASSESSMENT AND ANALYSIS: This phase is performed to determine the extent to which year 2000 issues exist in any of the inventoried areas and, if so, whether the issue is controllable (can be remedied by the Company) or non-controllable (is dependent upon vendor representation and/or remediation and can only be tested by the Company). (3) REPAIR AND REPLACEMENT: Renovations, replacements, and upgrades are made during this phase to remedy year 2000 issues. (4) TESTING: During this phase, independent testing is performed to ensure year 2000 issues have been mitigated. (5) CONTINGENCY PLANNING: This phase involves developing contingency plans for critical business processes and strategic business partner and vendor relationships if repair and/or renovation activities are either unsuccessful or are not expected to be completed in a timely manner. For critical areas, this activity is vital to ensure that all potential year 2000 issues which are not identified and corrected in the normal course of due diligence are addressed through contingency planning. The Company utilizes a multi-vendor strategy to maximize the effectiveness of its year 2000 efforts. The Company's primary external consultants include Compuware Inc. (analysis and renovation of mainframe and client/server application systems, tools for testing of application systems and professional services for application systems test planning) and Keane, Inc. (process control component analysis, test planning and execution, operations and engineering application systems inventory and analysis, risk assessment and contingency planning). PROJECT STATUS The following summarizes the Company's progress in the major project areas through October 30, 1998: PHASE

PROJECT AREA Inventory Assessment Repair/ Testing Contingency Replace Planning APPLICATION SYSTEMS Complete Complete In progress In progress In progress

PROCESS CONTROL COMPONENTS Complete Complete In progress In progress In progress

TECHNICAL INFRASTRUCTURE Complete Complete In progress In progress In progress

PHYSICAL INFRASTRUCTURE In progress In progress In planning In planning In planning

BUSINESS Ongoing Ongoing Not Not In progress PARTNERS AND process process applicable applicable SUPPLIERS

During the assessment phase, approximately 80 application systems were identified requiring some degree of repair or replacement. However, the Company's actions to upgrade to newer, more functional versions of vendor software have mitigated many existing year 2000issues. These upgrade activities will continue through mid-1999. Repair and replacement activities for internally developed application systems began in March 1998 and are approximately 60% complete. Such renovation activities are expected to be substantially complete by the end of 1998, with testing continuing into 1999. Reference is made to "Risks," page 19, for information on the status of CAMP. PROCESS CONTROL COMPONENTS. For process control components inventoried by the Company, approximately 43% are not date sensitive, and therefore are not affected by year 2000 issues. For date sensitive components, the Company estimates a year 2000 failure rate of approximately 10% to 12%. Replacement of affected components will continue through early 1999, while testing of components believed to be year 2000 ready is in progress and approximately10% complete. TECHNICAL INFRASTRUCTURE. Technical infrastructure has been analyzed directly with vendors and via the use of an external vendor research database service. This information is being used to guide year 2000 upgrades of infrastructure as necessary. Repair, replacement and testing activities are approximately55% complete for all categories of technical infrastructure. However, efforts in the critical area of application servers are 81% complete. The Company plans to complete a substantial portion of year 2000 upgrades by the end of 1998, with testing continuing into 1999.The Company is developing plans to determine the status of year 2000 readiness of its desktop personal computers. However, updated desktop infrastructure is being deployed that is year 2000 ready concurrent with the implementation of many new application systems described above. The Company plans to confirm year 2000 readiness of this infrastructure via testing, which is expected to be completed by mid-1999.PHYSICAL INFRASTRUCTURE. The Company is in the process of inventorying physical infrastructure components that may be subject to year 2000 problems. Critical physical infrastructure components that are related to process control have been inventoried and assessed in the process control area of the project. The inventory and analysis phases for remaining physical infrastructure should continue through year-end 1998, after which repair activity will begin. Where facilities are leased, the Company is identifying and working with building managers/lessors to ensure they are actively addressing the year 2000 issue.

BUSINESS PARTNER AND VENDOR RELATIONSHIPS. Strategic business partner and vendor relationships have been given priority in the inventory phase, and assessment has begun via questionnaires and interviews. The Company will continue to prioritize, identify and assess business partner and vendor relationships until significant areas of risk have been identified and mitigated, and is also preparing contingency plans in the event mitigation efforts are not successful. The Company plans to inventory all significant relationships by the end of 1998, including the year 2000 status of operations in Argentina and Australia in which the Company has equity investments. COSTS Based upon project status as described above, the Company expects to spend a total of approximately $22.6 million in connection with its Project Office efforts, its use of external consultants and the remediation of affected application systems. This estimate includes approximately $6.8 million of capitalized costs for hardware and software used (or expected to be used) in the testing phase, and for application system and technical infrastructure replacements. This estimate excludes costs incurred or expected to be incurred in connection with the development and installation of major new application systems which are expected to be year 2000 ready. Also, this estimate does not include the Company's potential share of year 2000 costs that may be incurred by partnerships and joint ventures in which the Company participates but is not the operator. As of September 30, 1998, the Company has incurred costs totaling $3.4 million (of which $1.0 million has been capitalized) in connection with its year 2000 efforts. RISKS Continuing difficulties and delays in the development of CAMP for use by the distribution subsidiaries have caused the Company to invoke a contingency plan which involves renovation of the current revenue application system and20 related application systems to make such systems year 2000 ready. These current systems collectively address the business processes which were to be handled by CAMP. Actions under this contingency plan began in August 1998 with implementation, including testing, scheduled to be completed by August 1999. The estimate of $22.6 million referred to above includes approximately$5.0 million of costs in connection with this CAMP contingency plan. Concurrent with this effort, the Company is continuing the development of CAMP and has capitalized $47.2 million related to this project as of September 30,1998. The CAMP core software is a licensed product of the Company's independent accountants, Pricewaterhouse Coopers LLP (PwC), and PwC is the primary information systems consultant on this project. Under a worst case scenario, the current revenue application systems would not be year 2000ready by the end of 1999 and CAMP would not be successfully implemented and year 2000 ready. Therefore, a secondary contingency plan to outsource certain billing processes is also under development. If a material year 2000 problem is not corrected in a timely manner, an interruption in, or a failure of, certain normal business activities or operations of the Company could occur. Such instances could materially and adversely affect the Company's financial position, cash flows and/or results of operations. Due to the uncertainty inherent in the year 2000 issue, including the uncertainty of year 2000 readiness of third party vendors, business partners and customers, the Company cannot determine at this time whether the consequences of any year 2000 failures will have a material impact on its financial position, cash flows or results of operations. However, the Company's Project Office activities and the implementation of new application systems are expected to reduce the risk of a material year 2000 failure.

-- Chuck the night driver (rienzoo@en.com), November 27, 1998

Answers

Chuck, thanks again for your post. Unfortunately, I couldn't really understand how the table was supposed to work. "Complete Complete In Progress In Progress" refers to what? I took the quote from the embedded system row of the table.

On the lighter side, I can't tell you how relieved I am that they are ensuring their billing systems will all be up and running. This way, I am sure to get a bill (with/without uninterrupted service). After all, if the contigency plan fail, there's the back up contingency plan. But what if that one doesn't work? Do they have a contingency plan for the contingency plan for the contingency plan?

-- Christine A. Newbie (vaganti01@aol.com), November 28, 1998.

Lesson 1: Buy Oracle.

Lesson 2: They spent 3.4 million as of Sept 30, starting March 1998. [Too little, too late. But they at least started.]

Lesson 3: "CAMP" accounting system is busted - bad. They are either planning to spend or already capitalized 47 million on this one system ... ????. Wow!!! ...plus 5 million in contingency plans alone if CAMP fails. Plus - all this to be spent by Aug 1999.

Lesson 4: TSWHTF? Not yet. TSIFTTF ( The S**t is Flying Towards the Fan. )

-- Robert A. Cook, P.E. (Kennesaw, GA) (cook.r@csaatl.com), November 29, 1998.