Targeting Six Percent Long-Term Growth

    SEATTLE, Nov. 6 /PRNewswire/ -- Cascade Natural Gas Corporation
(NYSE: CGC) reported record earnings of $15.4 million, or $1.39 per share for
fiscal year 2000, a 13.0% improvement compared to fiscal year 1999 results of
$13.6 million or $1.23 per share. The higher earnings reflect a $3.9 million
increase in operating margin, while operating expenses increased by just
$657,000.
    For the quarter ended September 30, a loss was reported of $2.1 million,
or $0.19 per share, which was  $438,000 greater than the $1.7 million loss, or
$0.15 per share, reported in 1999. The Company historically reports a seasonal
loss in the quarter ended September 30.
    "The record results achieved during fiscal year 2000 are a testament to
the commitment and hard work of our employees and the significant, profitable
growth potential in our service territory", stated Brian Matsuyama Chairman,
President and Chief Executive Officer of Cascade Natural Gas. "They also add
to Cascade's track record for delivering earnings growth. In five of the last
six years the Company has reported fiscal year earnings that far exceed our
long-term earnings growth target of six percent."
    Operating margins for the year improved $3.9 million, with $2.7 million
attributed to large industrial revenue growth and $1.2 million attributed to
residential and commercial revenue growth. Major factors influencing the
increases were:

    -- Natural gas deliveries to electric generation customers were
    27.5% higher in fiscal year 2000 producing $1.9 million more in operating
    margins. These electric generation customers were supplying electricity to
    meet increased demand in the Northwest as well as increased demand in the
    Southwest. There was also $487,000 of additional operating margin from new
    industrial customers and increases of about $300,000 from existing
    industrial customers other than electric.
    -- Margins from residential and commercial customers increased by
    $1.2 million over fiscal 1999. The addition of 7,874 residential and
    commercial customers, a 4.5% increase, contributed $2.5 million of margin.
    The positive impact of customer growth more than offset a 3.6% decline in
    per-customer consumption that was primarily due to warm weather.
    Temperatures were approximately 5% warmer than the 30-year average and
    3% warmer than fiscal year 1999.

    Operating expenses increased by just $657,000, or 1.8% during fiscal year
2000. Labor expense declined $652,000, as a result of efficiency gains, which
allowed for a 4.7% reduction in total employment. The decline in labor expense
occurred even with $680,000 of incentive payouts to employees for achieving
the efficiency and earnings per share objectives. Offsetting the labor savings
were increases in bad debts expense and other operating expenses. Depreciation
and amortization expense was up $452,000, or 3.5%, reflecting additional plant
investment to serve the Company's growing customer base. The small expense
increase reflects the Company's continuing emphasis on operating efficiency
improvement throughout the organization.
    Fiscal year 2000 capital expenditures were $15.7 million, $1.5 million
below 1999. The reduction is in part attributable to increased emphasis on
each new service installation meeting acceptable feasibility and profitability
requirements and improved construction efficiencies. The cost to install new
mains and services for residential and commercial customers has declined
approximately 3.5% since last year and 6.4% since fiscal year 1997.
    Fourth quarter 2000 results compared to fourth quarter 1999 were
influenced by $850,000 higher operating margin from electric generating
customers as well as higher revenue from gas management fees. Residential and
commercial margin was higher by $139,000 as the addition of 7,776 customers
more than offset lower consumption per customer due to warmer weather. Higher
depreciation expense, contributions to local agencies that assist low-income
residential customers with their heating bills, and payroll/property taxes
offset the margin increases.
    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 November 15, 2000 to shareholders
of record at the close of business October 13, 2000.
    Cascade Natural Gas Corporation is a local distribution company providing
natural gas service to over 185,000 customers in the states of Washington and
Oregon.

                       Cascade Natural Gas Corporation
         Financial Highlights - (Thousands, except per share amounts)
                          Fourth Quarter Fiscal 2000

                                    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%)


                         Fiscal Year 1999
                                   Three Months Ended                   Year
                                                                       Ended
                                Dec 31   Mar 31   Jun 30    Sep 30    Sep 30

    Revenues                   $62,917  $71,118  $42,869   $31,706   208,610
    Operating Margin            27,162   29,195   17,292    12,418    86,067
    Cost of Operations          13,724   13,791   13,501    12,712    53,728
    Operating Income (Loss)     13,438   15,404    3,791     (294)    32,339
    Interest and Other           2,622    2,584    2,477     2,528    10,211
    Income Taxes                 4,062    4,801      503   (1,291)     8,075
    Net Earnings (Loss)          6,754    8,019      811   (1,531)    14,053
    Preferred Dividends            123      119      121       120       483
    Net Earnings (Loss)
     Available to
     Common Shareholders        $6,631   $7,900     $690  $(1,651)   $13,570

    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                   $0.60    $0.72    $0.06   $(0.15)     $1.23
    Dividends Paid per share     $0.24    $0.24     0.24      0.24     $0.96
    Capital Expenditures (net)  $6,038   $3,206    3,488     4,530   $17,262
    Book Value Per Share        $10.45   $10.92    10.75     10.33    $10.33
    Market Closing Price        $18.13   $14.94    19.00     17.88    $17.88
    Customers (End of Period)      177      179      178       177       177
    Gas Deliveries (Therms):
     Residential & Commercial   76,888   88,636   40,937    20,406   226,867
     Industrial & Other        347,585  281,395  240,793   286,768 1,156,541
    Degree Days
     Normal                      2,002    2,367      982       318     5,669
     Actual                      2,015    2,205    1,014       302     5,536
    Colder (warmer) than normal     1%     (7%)       3%      (5%)      (2%)

    Contact:  J. D. Wessling
              Cascade Natural Gas Corporation
              206-624-3900

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