SEATTLE, Jan. 16 /PRNewswire/ -- Cascade Natural Gas Corporation
(NYSE: CGC) reported fiscal year (FY) first quarter earnings of $8.4 million,
or $.76 per share, a 10.0% improvement compared to FY 2000 first quarter
results of $7.6 million or $.69 per share. The higher earnings reflect a
$2.0 million increase in operating margin, while the cost of operations
increased by just $658,000. The results are on track to meet FY earnings
growth targets of 6%.

    Operating margins for the quarter improved $2.0 million, with $2.2 million
attributed to residential and commercial revenue growth while margin from
large industrial customers declined $222,000. Major factors influencing margin
changes were:

    -- The addition of 7,979 residential and commercial customers, a
       4.4% increase, added $824,000 of margin.
    -- Residential per-customer consumption increased by 10.4% and commercial
       by 1.9%, contributing $1.3 million to first quarter operating margin.
       Residential consumption was influenced by temperatures in the service
       territory that were 19% colder than FY 2000 first quarter and
       15% colder than the average of the past five years.  On the other hand,
       consumption was probably tempered by higher rates which recover this
       season's increased wholesale gas prices, and by electric utility and
       governmental campaigns to strictly limit energy usage in the face of
       impending Northwest electric shortages.
    -- Industrial and other operating margin declined $222,000 in the quarter
       compared to the first quarter FY 2000 primarily due to a 1% decrease in
       customer deliveries.  From late November through December, Northwest
       spot market gas prices were exceptionally high, far exceeding prices in
       the rest of the country.  Some customers who relied on the spot market
       for their supplies reduced operating levels or switched to alternative
       fuels, primarily oil products.  Today, Northwest spot market prices
       have dropped back to be in line with the rest of the nation and are
       below the posted prices of oil alternatives; consequently, we believe
       the affected customers will return to using gas over time.  During the
       quarter, ten new industrial customers contributed $35,000 of additional
       margin.

    The Cost of Operations increased 5% with half of the increase attributable
to expense related to design of a new integrated work management system. There
was also a $119,000 increase in depreciation consistent with additions to
capital assets to serve a growing customer base.
    Capital spending in the first quarter was $5.3 million. Total fiscal year
capital spending is expected to be $25.4 million.
    The Washington Utility and Transportation Commission approved, effective
January 12, Cascade's request to pass on higher gas costs to customers. New
rates will result in a 26% increase to residential customers, 30% to
commercial customers, and a 33% increase to smaller industrial customers
served under core rate schedules. These rate adjustments allow Cascade to
recover its expected higher commodity component of gas costs. A residential
customer with average consumption will experience a $13.16 monthly increase.
    Statements contained in this report that are not historical in nature are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are subject to risks
and uncertainties that may cause actual future results to differ materially.
Such risks and uncertainties with respect to the Company include, among
others, its ability to successfully implement internal performance goals,
competition from alternative forms of energy, consolidation in the energy
industry, performance issues with key natural gas suppliers, the capital-
intensive nature of the Company's business, regulatory issues, including the
need for adequate and timely rate relief to recover increased capital and
operating costs resulting from customer growth and to sustain dividend levels,
the weather, increasing competition brought on by deregulation initiatives at
the federal and state regulatory levels, the potential loss of large volume
industrial customers due to "bypass" or the shift by such customers to special
competitive contracts at lower per unit margins, exposure to environmental
cleanup requirements, and economic conditions, particularly in the Company's
service area.
    The Company previously announced its declaration of a $0.24 per share
quarterly dividend on common stock, payable February 15, 2001 to shareholders
of record at the close of business January 15, 2001.
    Cascade Natural Gas Corporation is a local distribution company providing
natural gas service to over 190,000 customers in the states of Washington and
Oregon.

    CONTACT:  J. D. Wessling of Cascade Natural Gas Corporation,
206-624-3900

                       Cascade Natural Gas Corporation
         Financial Highlights - (Thousands, except per share amounts)
                          First Quarter Fiscal 2001


                                              Fiscal Year 2001

                                        Three Months Ended             Year
                                                                     to Date
                                Dec 31    Mar 31   Jun 30   Sep 30    Dec 31

    Revenues                   $104,965                             $104,965
    Operating Margin             29,620                               29,620
    Cost of Operations           13,674                               13,674

    Operating Income (Loss)      15,946        0        0        0    15,946
    Interest and Other            2,726                                2,726
    Income Taxes                  4,825                                4,825

    Net Earnings (Loss)           8,395        0        0        0     8,395

    Preferred Dividends               0                                    0

    Net Earnings (Loss)
     Available
        to Common Shareholders   $8,395       $0       $0       $0    $8,395


    Common Shares Outstanding:
      End of Period              11,045                               11,045
      Average                    11,045                               11,045

    Net Earnings (Loss) Per
     Share                        $0.76                                $0.76

    Dividends Paid per share      $0.24                                $0.24

    Capital Expenditures (net)   $5,255                               $5,255

    Book Value Per Share         $11.31                               $11.31

    Market Closing Price         $18.81                               $18.81

    Customers (End of Period)       193                                  193

    Gas Deliveries (Therms):
      Residential & Commercial   87,708                               87,708
      Industrial & Other        354,506                              354,506

    Degree Days
      Normal                      2,002                                2,002
      Actual                      2,308                                2,308

    Colder (warmer) than
     normal                         15%                                  15%

                       Cascade Natural Gas Corporation
         Financial Highlights - (Thousands, except per share amounts)
                          First Quarter Fiscal 2001


                                              Fiscal Year 2000

                                        Three Months Ended            Year
                                                                      Ended
                                Dec 31   Mar 31   Jun 30   Sep 30    Sep 30

    Revenues                    $73,791  $88,830  $41,563  $37,752   $241,936
    Operating Margin             27,608   32,492   16,068   13,826     89,994
    Cost of Operations           13,016   14,244   13,444   14,293     54,997

    Operating Income (Loss)      14,592   18,248    2,624     (467)    34,997
    Interest and Other            2,559    2,709    2,692    2,612     10,572
    Income Taxes                  4,392    5,672      (23)    (990)     9,051

    Net Earnings (Loss)           7,641    9,867      (45)  (2,089)    15,374

    Preferred Dividends               1        1        1        1          4

    Net Earnings (Loss)
     Available
        to Common Shareholders   $7,640   $9,866     ($46) ($2,090)   $15,370


    Common Shares Outstanding:
      End of Period              11,045   11,045   11,045   11,045     11,045
      Average                    11,045   11,045   11,045   11,045     11,045

    Net Earnings (Loss) Per
     Share                        $0.69    $0.89   ($0.00)  ($0.19)     $1.39

    Dividends Paid per share      $0.24    $0.24     0.24     0.24      $0.96

    Capital Expenditures (net)   $2,990   $4,050    4,076    4,821    $15,937

    Book Value Per Share         $10.81   $11.46    11.22    10.79     $10.79

    Market Closing Price         $16.13   $16.13    16.69    17.50     $17.50

    Customers (End of Period)       185      187      185      185        185

    Gas Deliveries (Therms):
      Residential & Commercial   79,432   98,443   30,910   19,782    228,567
      Industrial & Other        358,102  322,967  287,644  377,275  1,345,988

    Degree Days
      Normal                      2,002    2,367      982      318      5,669
      Actual                      1,944    2,361      765      302      5,372

    Colder (warmer) than normal     (3%)     (0%)    (22%)     (5%)       (5%)

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