Weather Insurance Will Likely Bolster Performance

    PITTSFIELD, Mass., March 10 /PRNewswire/ -- Given the experience with
warmer than normal weather patterns associated with El Nino in the last
heating seasons and predictions for continued unusual weather associated with
the La Nina phenomenon, the Company made a strategic decision to purchase
insurance for the current heating season.  This insurance is intended to
mitigate financial impacts resulting from extended periods of warmer than
normal winter temperatures.
    The weather insurance, which the Company purchased, provides coverage for
the heating season beginning November 1, 1998 through March 31, 1999.  Under
the terms of the policy, the Company will receive insurance proceeds if
weather for that period proves to be more than 5% warmer than normal, based on
average heating degree days.  As of the end of January, weather over the term
of the policy had been 9% warmer than normal.  This is the first time that the
Company has purchased this type of insurance coverage.

    Investing in the Future
    With the completion of the holding company transaction in January, the
Company is now poised to aggressively compete in open markets being created by
deregulation.  The adoption of this new corporate structure was a critical
element if we were to have the flexibility necessary to be competitive.  This
represents a considerable investment in the Company's future, but one that
properly positions the Company for future growth and expansion.
    The Company's recent investment in updated information systems and
software also represents a strong step toward the future.  This new technology
will provide the flexibility necessary to better serve our customers and to
broaden the range of services that we offer.  In addition, it is designed to
address Y2K issues in many of our business applications.
    These investments are a strong indicator of our confidence in the future
and of our intention to compete aggressively in new markets.  These are
investments which hold promise of a solid return in terms of future business
and we will continue to make the necessary investments to be successful in
both regulated and unregulated business ventures.

    Earnings
    Largely due to unseasonable winter weather, per share earnings for the
quarter were $0.25 versus $0.47 for the same period a year ago.  Warmer
weather has reduced firm sales and has had a similar effect on propane
revenues.  Earnings have also been affected by the expense of adopting a
holding company structure and investments made in updated information systems
and technology.
    It should be noted that earnings, at this point, do not reflect any
potential proceeds from our weather insurance.  The Company will reflect
proceeds under this policy during the third quarter ending March 31, 1999.

    BERK
    Berkshire Energy Resources (Nasdaq: BERK) is an energy holding company
formed on January 1, 1999 with headquarters in Pittsfield, Massachusetts.
Berkshire Energy Resources subsidiaries include The Berkshire Gas Company,
Berkshire Propane, Inc. and Berkshire Energy Marketing, Inc.
    The Berkshire Gas Company is a natural gas utility serving western
Massachusetts for more than 145 years.  The Company provides natural gas
service to 34,000 customers and posted operating revenues of $50 million
dollars in the last fiscal year.
    Berkshire Propane, established in 1955, provides retail propane service
across a 5,000-square-mile territory in western Massachusetts, southern
Vermont and western New York.
    Berkshire Energy Marketing, established in 1998, provides one stop energy
services to commercial and industrial customers in unregulated energy markets.
    Berkshire Energy Resources is traded on the Nasdaq under the symbol BERK.

Link to this page: