UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~March 3031, ~~2007~~2009

o [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ______________

Commission File Number: 001-10608

FLORIDA PUBLIC UTILITIES COMPANY

(Exact name of registrant as specified in its charter)


Florida	59-0539080
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

401 South Dixie Highway,

West Palm Beach, Fl. 33401

(Address of principal executive offices)

(561) 832-0872

(~~Address and~~Registrant’s telephone number, ofincluding ~~registrant’s~~area ~~principal executive offices~~code)

~~and~~Indicate by check mark whether the registrant (1) has filed all ~~principal~~reports ~~place~~required to be filed by Section 13 or 15(d) of ~~business~~the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant ~~(1)~~ has ~~filed~~submitted electronically ~~all~~and ~~reports~~posted ~~required~~on toits corporate web site, if any, every Interactive ~~be filed~~Data byFile ~~Section~~required 13to orbe ~~15(d)~~submitted ofand ~~the~~posted ~~Securities~~pursuant ~~Exchange~~to ~~Act~~rule 405 of ~~1934~~Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to ~~file~~submit ~~such reports),~~ and ~~(2)~~post ~~has been subject to~~ such ~~filing requirements for the past 90 days~~files). ~~Yes x No o~~

~~Indicate by~~Yes ~~check~~[ ] No mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):[ ]

~~Large~~Indicate by check mark whether the registrant is a large accelerated filer, oan ~~Accelerated~~accelerated filer, oa ~~Non~~non-accelerated filer, xor a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

~~Indicate~~Large byaccelerated ~~check~~filer ~~mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x~~[ ]

OnAccelerated ~~August 1,~~filer ~~2007, there were 6,036,178 shares of $1.50 par value common stock outstanding.~~[ ]

INDEX
Part I.	Financial Information
Item 1.	Financial Statements
	Condensed Consolidated Statements of Income
	Condensed Consolidated Balance Sheets
	Condensed Consolidated Statements of Cash Flows
	Notes to Condensed Consolidated Financial Statements
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.	Quantitative and Qualitative Disclosures about Market Risk
Item 4T.	Controls and Procedures
Part II.	Other Information
Item 4.	Submission of Matters to a Vote of Security Holders
Item 6.	Exhibits
	Signatures

Non-accelerated filer [ ]

~~Index~~Smaller reporting company [X]

~~PART~~(Do not I.check ~~FINANCIAL~~if ~~INFORMATION~~a smaller reporting company)

~~Item~~Indicate 1by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ~~Financial~~[ ] No ~~Statements~~[X]

FLORIDA PUBLIC UTILITIES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except share data)
	Three Months Ended June 30,						Six Months Ended June 30,
Revenues	2007			2006			2007			2006
Natural gas	$	15,502		$	14,632		$	36,075		$	41,586
Electric		13,135			11,815			26,493			23,511
Propane gas		3,831			3,528			8,512			8,288
Total revenues		32,468			29,975			71,080			73,385
Cost of Fuel and Other Pass Through Costs		20,699			18,476			45,468			47,689
Gross Profit		11,769			11,499			25,612			25,696
Operating Expenses
Operation and maintenance		7,443			6,829			14,616			13,696
Depreciation and amortization		2,031			1,925			4,103			3,903
Taxes other than income taxes		699			680			1,559			1,504
Total operating expenses		10,173			9,434			20,278			19,103
Operating Income		1,596			2,065			5,334			6,593
Other Income and (Deductions)
Merchandise and service revenue		752			1,090			1,667			2,316
Merchandise and service expenses		(670	)		(1,007	)		(1,480	)		(2,192	)
Other income		145			133			296			284
Interest expense		(1,216	)		(1,119	)		(2,383	)		(2,332	)
Total other deductions – net		(989	)		(903	)		(1,900	)		(1,924	)
Earnings Before Income Taxes		607			1,162			3,434			4,669
Income Taxes		(197	)		(424	)		(1,226	)		(1,710	)
Net Income		410			738			2,208			2,959
Preferred Stock Dividends		7			7			14			14
Earnings For Common Stock	$	403		$	731		$	2,194		$	2,945
(Basic and Diluted):
Earnings Per Common Share	$	0.07		$	0.12		$	0.36		$	0.49
Dividends Declared Per Common Share	$	0.1125		$	0.1075		$	0.2200		$	0.2108
Average Shares Outstanding		6,030,928			5,985,162			6,027,833			5,982,599
These financial statements should be read with the accompanying Notes to Condensed Consolidated Financial Statements.

On May 7, 2009, there were 6,121,114 shares of $1.50 par value common stock outstanding.

~~Index~~INDEX

FLORIDA PUBLIC UTILITIES COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
ASSETS	June 30, 2007			December 31, 2006
Utility Plant
Utility Plant	$	194,067		$	188,968
Less Accumulated depreciation		62,078			59,757
Net utility plant		131,989			129,211
Current Assets
Cash		1,315			84
Accounts receivable		10,446			12,199
Allowance for uncollectible accounts		(406	)		(429	)
Unbilled receivables		1,687			1,957
Notes receivable		292			298
Inventories (at average unit cost)		4,025			4,120
Prepaid expenses		418			963
Under-recovery of fuel costs		1,456			862
Deferred income taxes-current		561			418
Other regulatory assets-environmental		456			456
Other regulatory assets-storm reserve		162			228
Deferred charges-current		260			495
Total current assets		20,672			21,651
Other Assets
Investments held for environmental costs		3,413			3,364
Other regulatory assets-environmental		7,513			7,828
Other regulatory assets-storm reserve		-			42
Other regulatory assets-retirement plans		287			587
Long-term receivables and other investments		5,504			5,740
Deferred charges		6,146			6,001
Goodwill		2,405			2,405
Intangible assets (net)		4,476			4,405
Total other assets		29,744			30,372
Total Assets	$	182,405		$	181,234
These financial statements should be read with the accompanying Notes to Condensed Consolidated Financial Statements.

Part I.

~~Index~~Financial Information

FLORIDA PUBLIC UTILITIES COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
CAPITALIZATION AND LIABILITIES	June 30, 2007		December 31, 2006
Capitalization
Common shareholders' equity	$	48,813	$	47,572
Preferred stock		600		600
Long-term debt		50,730		50,702
Total capitalization		100,143		98,874
Current Liabilities
Line of credit		1,105		3,466
Accounts payable		10,098		10,279
Insurance accrued		150		181
Interest accrued		598		789
Other accruals and payables		3,546		3,023
Taxes accrued		2,164		1,180
Over-earnings liability		760		722
Over-recovery of fuel costs and other		4,416		4,011
Customer deposits		10,407		9,608
Total current liabilities		33,244		33,259
Other Liabilities
Deferred income taxes		16,713		17,436
Environmental liability		12,768		13,140
Regulatory liability-storm reserve		1,697		1,636
Regulatory liabilities-other		9,947		9,676
Other liabilities		7,893		7,213
Total other liabilities		49,018		49,101
Total Capitalization and Liabilities	$	182,405	$	181,234
These financial statements should be read with the accompanying Notes to Condensed Consolidated Financial Statements.

Item 1.

~~Index~~Financial Statements

FLORIDA PUBLIC UTILITIES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in thousands)
	Six Months Ended June 30,
	2007			2006
Net cash provided by operating activities	$	10,980		$	16,155
Investing Activities
Construction expenditures		(6,537	)		(6,751	)
Proceeds received on notes receivable		371			296
Other		(150	)		513
Net cash used in investing activities		(6,316	)		(5,942	)
Financing Activities
Net decrease in short-term borrowings		(2,361	)		(8,121	)
Dividends paid		(1,307	)		(1,899	)
Other increases		235			232
Net cash used in financing activities		(3,433	)		(9,788	)
Net increase in cash		1,231			425
Cash at beginning of period		84			695
Cash at end of period	$	1,315		$	1,120
These financial statements should be read with the accompanying Notes to Condensed Consolidated Financial Statements.

Condensed Consolidated Statem ents of Income

~~Index~~Condensed Consolidated Statements of Comprehensive Income

~~FLORIDA~~Condensed ~~PUBLIC~~Consolidated ~~UTILITIES~~Balance ~~COMPANY~~Sheets

~~NOTES~~Condensed TOConsolidated ~~CONDENSED~~Statements ~~CONSOLIDATED~~of ~~FINANCIAL~~Common ~~STATEMENTS~~Shareholders’ Equity

~~(Unaudited)~~Condensed Consolidated Statements of Cash Flows

~~June~~Notes ~~30,~~to ~~2007~~Condensed Consolidated Financial Statements

1Item 2. ~~Basis of Presentation~~

~~The~~Management’s ~~accompanying~~Discussion unaudited condensed consolidated financial statements have been prepared in accordance with the generally accepted accounting principles in the United States (GAAP) for interim financial information and ~~with~~Analysis ~~the instructions for Form 10-Q and Article 10~~ of ~~Regulation~~Financial ~~S-X.~~Condition Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments necessary for fair presentation have been included. The operating results for the period are not necessarily indicative of the results that may be expected for the full year. For further information, refer to the audited consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.

2. and Results ~~Use~~ of ~~Estimates~~Operations

~~The~~Item preparation of financial statements in conformity with GAAP requires the Company to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of any contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period3. Significant estimates include allowances, accruals for pensions, environmental liabilities, liability reserves, regulatory deferred tax liabilities, unbilled revenue and over-earnings liability. Actual results may differ from these estimates.

3.Quantitative and ~~Regulation~~Qualitative Disclosures about Market Risk

~~The~~Item ~~financial statements are prepared in accordance with the provisions of Statement of Financial Accounting Standards (SFAS) No~~4T. 71 – "Accounting for the Effects of Certain Types of Regulation". SFAS No. 71 recognizes that accounting for rate-regulated enterprises should reflect the relationship of costs and revenues introduced by rate regulation. A regulated utility may defer recognition of a cost (a regulatory asset) or show recognition of an obligation (a regulatory liability) if it is probable that, through the ratemaking process, there will be a corresponding increase or decrease in revenues. The Company has recognized certain regulatory assets and liabilities in the condensed consolidated balance sheets.

AsControls a result, Florida Public Service Commission (FPSC) regulation has a significant effect on the Company’s results of operations. The FPSC approves rates that are intended to permit a specified rate of return on investment. Rate tariffs allow the flexibility of automatically passing through the cost of natural gas and ~~electricity~~ ~~to customers. Increases in the operating expenses of the regulated segments may require a request for increases in the rates charged to customers.~~Procedures

4Part II. ~~Pledged Assets~~

~~Substantially,~~Other all of the Company’s utility plant and the shares of its wholly owned subsidiary, Flo-Gas Corporation, collateralize the Company’s First Mortgage Bonds (long-term debt). Cash, accounts receivable and inventory are collateral for the line of credit.Information

~~Index~~Item 1A.

~~5. Restriction on Dividends~~Risk Factors

~~The~~Item ~~Company’s Fifteenth Supplemental Indenture of Mortgage and Deed of Trust restricts the amount that is available for cash dividends~~6. At June 30, 2007, approximately $9.8 million of retained earnings were free of such restriction and available for the payment of dividends. The Company’s line of credit agreement contains covenants that, if violated, could restrict or prevent the payment of dividends. The Company is not in violation of these covenants.

~~6. Allowance for Uncollectible Accounts~~Exhibits

The Company records an allowance for uncollectible accounts based on historical information and trended current economic conditions. The bad debt write-offs for the second quarter 2007 were $135,000 while the provisions were $115,000.Signatures

7PART I. ~~Storm Reserves~~

AsFINANCIAL of June 30, 2007, the Company had a storm reserve of approximately $1.7 million for the electric segment. The Company does not have a storm reserve for the natural gas or propane gas segments. Any future storm costs affecting the natural gas segment will be deferred for recovery from customers either through rate increases or through applying any available over-earnings as a reduction to the costs. All such deferred costs are subject to review and approval by the FPSC.INFORMATION

~~The Company~~Item ~~deferred storm costs for the natural gas segment incurred in 2004 as a regulatory asset on the condensed consolidated balance sheets~~1. The FPSC approved recovery of these storm costs, plus interest and revenue related taxes, over a 30-month period beginning in November 2005. As of June 30, 2007, the remaining balance of these storm costs to be recovered is $159,000.

~~The~~Financial FPSC staff issued a recommendation on August 2, 2007, and if approved, the overearnings for 2005 will remain as currently estimated, and the disposition will be used to fund our storm reserve and eliminate the storm surcharge and the related regulatory asset – storm reserve in our natural gas operations.Statements

8. Goodwill and Other Intangible Assets


FLORIDA PUBLIC UTILITIES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share data)

	Three Months Ended
	March 31,
Revenues	2009	2008
Natural gas	$19,711	$22,137
Electric	22,033	17,523
Propane gas	4,037	5,370
Total revenues	45,781	45,030
Cost of Fuel and Other Pass Through Costs	30,662	30,912
Gross Profit	15,119	14,118

Operating Expenses
Operation and maintenance	9,871	6,981
Depreciation and amortization	2,365	2,253
Taxes other than income taxes	878	873
Total operating expenses	13,114	10,107
Operating Income	2,005	4,011

Other Income and (Deductions)
Merchandise and service revenue	761	722
Merchandise and service expenses	(649)	(624)
Other income	174	130
Interest expense	(1,146)	(1,223)
Total other deductions – net	(860)	(995)
Earnings Before Income Taxes	1,145	3,016
Income Taxes	(401)	(1,066)
Net Income	744	1,950
Preferred Stock Dividends	7	7
Earnings for Common Stock	$737	$1,943

(Basic and Diluted):
Earnings Per Common Share	$0.12	$0.32

Dividends Declared Per Common Share	$0.1175	$0.1125

Average Shares Outstanding	6,116,505	6,071,565
These financial statements should be read with the accompanying Notes to Condensed Consolidated Financial Statements.

The Company does not amortize goodwill or intangibles with indefinite lives. The Company periodically tests the applicable reporting segments, natural gas and propane gas, for impairment. In the event goodwill or intangible assets related to a segment are determined to be impaired, the Company would write down such assets to fair value. The impairment test performed in 2007 and 2006 showed no impairment for either reporting segment.


FLORIDA PUBLIC UTILITIES COMPANY CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (Dollars in thousands)
		Three Months Ended March 31,
		2009	2008
Net income		$744	$1,950
Other comprehensive gain
Pension and post retirement costs		1,825	35
Income tax expense on other comprehensive gain		(687)	(13)
Comprehensive Income		$1,882	$1,972
These financial statements should be read with the accompanying Notes to Condensed Consolidated Financial Statements.
FLORIDA PUBLIC UTILITIES COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)

ASSETS	March 31,		December 31,
	2009		2008
Utility Plant
Utility Plant	$212,013		$210,628
Less Accumulated depreciation	69,639		68,303
Net utility plant	142,374		142,325

Current Assets
Cash	2,904		2,997
Accounts receivable	15,008		13,973
Income taxes receivable	1,780		2,211
Allowance for uncollectible accounts	(577)		(455)
Unbilled receivables	1,788		2,041
Notes receivable	5,663		252
Inventories (at average unit cost)	3,555		3,961
Prepaid expenses	765		1,037
Under-recovery of fuel costs	-		756
Deferred income taxes-current	899		513
Regulatory assets-environmental – current	456		456
Deferred charges-current	220		155
Special deposit – fuel contract	-		130
Total current assets	32,461		28,027

Other Assets
Regulatory assets-environmental	6,513		6,636
Regulatory asset-retirement plan	2,822		9,945
Long-term receivables and other investments	15		5,619
Investments held for environmental costs	3,516		3,507
Deferred charges	6,306		6,409
Goodwill	2,405		2,405
Intangible assets (net)	3,984		4,058
Total other assets	25,561		38,579
Total Assets	$200,396		$208,931

These financial statements should be read with the accompanying Notes to Condensed Consolidated Financial Statements.

Goodwill associated with the Company’s acquisitions consists of $500,000 in the natural gas segment and $1.9 million in the propane gas segment. The summary of intangible assets at June 30, 2007, is as follows:


FLORIDA PUBLIC UTILITIES COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)

CAPITALIZATION AND LIABILITIES	March 31,	December 31,
	2009	2008
Capitalization
Common shareholders' equity	$49,836	$48,512
Preferred stock	600	600
Long-term debt	47,940	47,920
Total capitalization	98,376	97,032

Current Liabilities
Line of credit	3,047	12,747
Accounts payable	10,240	11,481
Long-term debt - current	1,409	1,409
Insurance accrued	222	265
Interest accrued	1,145	1,081
Other accruals and payables	3,177	3,241
Environmental Liability - current	1,068	774
Taxes accrued	4,301	1,902
Over-recovery of fuel costs	4,361	1,965
Customer deposits	13,320	11,099
Total current liabilities	42,290	45,964

Other Liabilities
Deferred income taxes	17,694	18,023
Environmental liability	12,337	12,655
Regulatory liability- storm reserve	2,448	2,418
Regulatory liabilities- other	11,198	11,011
Regulatory liability- retirement	13,690	19,352
Other liabilities	2,363	2,476
Total other liabilities	59,730	65,935
Total Capitalization and Liabilities	$200,396	$208,931

These financial statements should be read with the accompanying Notes to Condensed Consolidated Financial Statements.

Index


FLORIDA PUBLIC UTILITIES COMPANY CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY (Unaudited)
(Dollars in thousands, except for shares)
							Accumulated
	Common Stock					Treasury	Other	Common
	Shares	Aggregate	Paid-in	Retained	Treasury	Shares	Comprehensive	Shareholders'
	Issued	Par Value	Capital	Earnings	Shares	Cost	Income(Loss)	Equity
Balances as of December 31, 2008	6,199,070	$9,299	$6,065	$36,424	97,350	$(1,725)	$(1,551)	$48,512
Net income				744				744
Dividends				(725)				(725)
Other Comprehensive Income							1,138	1,138
Stock plans	13,434	20	123		(10,527)	24		167
Balances as of March 31, 2009	6,212,504	$9,319	$6,188	$36,443	86,823	$(1,701)	$(413)	$49,836
These financial statements should be read with the accompanying Notes to Condensed Consolidated Financial Statements.

Intangible Assets (Dollars in thousands)
FLORIDA PUBLIC UTILITIES COMPANY
		2007
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Customer distribution rights	(Indefinite life)	$	1,900
(Dollars in thousands)
Customer relationships	(Indefinite life)		900
	Three Months Ended
Software	(Five to nine year life)		3,367
	March 31,
Accumulated amortization			(1,691	)
	2009		2008
Total intangible assets, net of amortization		$	4,476
Net cash provided by operating activities	$12,031		$3,785
Investing Activities
Construction expenditures	(1,981)		(2,969)
Proceeds received on notes receivable	252		283
Other	(123)		(120)
Net cash used in investing activities	(1,852)		(2,806)
Financing Activities
Net decrease in short-term borrowings	(9,700)		(1,442)
Dividends paid	(724)		(688)
Other increases	152		194
Net cash used in financing activities	(10,272)		(1,936)
Net (decrease) increase in cash	(93)		(957)
Cash at beginning of period	2,997		3,478
Cash at end of period	$2,904		$2,521
These financial statements should be read with the accompanying Notes to Condensed Consolidated Financial Statements.

~~The amortization~~FLORIDA ~~expense~~PUBLIC ofUTILITIES ~~intangible assets was approximately $174,000 for the six months ended June 30, 2007.~~COMPANY

9.NOTES ~~Common~~TO ~~Shareholders’~~CONDENSED ~~Equity~~CONSOLIDATED FINANCIAL STATEMENTS

Items impacting common shareholders’ equity other than income and dividends are the dividend reinvestment program, employee stock purchase program, stock compensation plans and treasury stock. The net impact of these additional items increased common shareholders’ equity approximately $281,000 for the six months ended June 30, 2007. Accumulated other comprehensive loss, comprised of the deferred cost of employee benefit plans, totaled approximately $50,000 and $100,000 as of June 30, 2007 and December 31, 2006, respectively. The change to other comprehensive loss for the quarter ending June 30, 2007 was an approximate net $26,000 gain.(Unaudited)

~~10.~~March ~~Over-earnings~~31, ~~– Natural Gas Segment~~2009

~~The FPSC approves rates that are intended to permit a specified rate of return on investment and limits the maximum amount of earnings of regulated operations~~1. ~~The Company has agreed with the FPSC staff to limit the earned return on equity for regulated natural gas and electric operations.~~

~~The~~Basis ~~Company has recorded estimated 2006 and 2005 over-earnings for regulated natural gas operations~~ of $25,000 and $735,000, respectively. We revised our estimate for the 2005 overearnings in the second quarter of 2007 an additional $85,000. These liabilities are included in the over-earnings liability on the Company’s condensed consolidated balance sheet of June 30, 2007. The calculations supporting these liabilities are complex and involve a variety of projections and estimates before the ultimate settlement of such obligations. Estimates may be revised as expectations change and factors become known and determinable.Presentation

The ~~2005 and~~ ~~2006~~accompanying ~~over-earnings~~unaudited ~~liabilities~~condensed ~~are~~consolidated ~~based~~financial statements onhave ~~the~~been ~~Company’s~~prepared ~~best~~in ~~estimates, but~~accordance with the ~~amounts~~generally ~~could~~accepted accounting ~~change~~principles ~~upon~~in the ~~FPSC~~United ~~finalization~~States ~~expected~~(GAAP) infor ~~2007~~interim ~~and~~financial ~~2008.~~information ~~The~~and ~~FPSC~~with ~~determines~~ the ~~disposition~~instructions offor ~~over~~Form 10-~~earnings~~Q ~~with~~and ~~alternatives that~~Article ~~include~~10 ~~refunding~~of toRegulation S-X. ~~customers~~Accordingly, ~~increasing~~they ~~storm~~do ~~damage~~not orinclude ~~environmental~~all of the information and footnotes ~~reserves~~required orby ~~reducing~~GAAP ~~any~~for ~~depreciation~~complete ~~reserve~~financial ~~deficiency~~statements. ~~The~~In ~~FPSC~~the ~~staff~~opinion ~~issued~~of amanagement, ~~recommendation~~all onadjustments ~~August~~necessary 2,for ~~2007,~~fair ~~and~~presentation ifhave ~~approved,~~been ~~the~~included. The ~~overearnings~~operating results for ~~2005 will~~the ~~remain~~period asare ~~currently~~not ~~estimated,~~necessarily ~~and~~indicative of the results ~~disposition~~that ~~will~~may be ~~used~~expected tofor ~~fund our storm~~the ~~reserve~~full ~~and~~year. ~~eliminate~~For further information, refer to the ~~storm~~audited ~~surcharge~~consolidated financial statements and ~~the~~footnotes ~~related~~included ~~regulatory~~in the ~~asset –~~Company’s ~~storm~~Annual ~~reserve~~Report inon ~~our~~Form ~~natural~~10-K ~~gas~~for ~~operations~~the year ended December 31, 2008.

~~Index~~2.

~~11.~~Use of ~~Environmental Contingencies~~Estimates

The ~~Company~~ ispreparation ~~subject~~of tofinancial ~~federal~~statements ~~and~~in ~~state~~conformity ~~legislation~~ with ~~respect to soil,~~GAAP ~~groundwater~~requires ~~and~~the ~~employee~~Company ~~health~~to ~~and~~make ~~safety~~certain ~~matters~~estimates and toassumptions ~~environmental~~that affect the ~~regulations~~reported ~~issued~~amounts byof ~~the~~assets ~~Florida~~and ~~Department~~liabilities, disclosure of ~~Environmental~~any ~~Protection~~contingent ~~(FDEP),~~assets ~~the~~and ~~United~~liabilities ~~States~~at ~~Environmental~~the ~~Protection~~date ~~Agency~~of ~~(EPA)~~the financial statements and ~~other~~the ~~federal~~reported ~~and~~amounts ~~state~~of ~~agencies.~~revenues ~~For~~and ~~full~~expenses ~~disclosure~~during of the ~~legal~~reporting ~~items~~period. ~~that~~Significant ~~impact~~estimates include ~~the Company~~allowances, ~~please~~ ~~refer~~accruals tofor ~~"Contingencies"~~pensions, inenvironmental ~~the~~liabilities, ~~Notes~~liability reserves, toregulatory ~~Consolidated~~deferred ~~Financial Statements~~tax inliabilities, ~~the~~unbilled ~~Company’s~~revenue ~~Form 10~~and over-Kearnings ~~for~~liability. ~~the~~Actual ~~year~~results ~~ended~~may ~~December~~differ ~~31, 2006~~from these estimates.

123. ~~Reclassification~~

~~Certain~~Regulation ~~amounts in the 2006 financial statements have been reclassified to conform to the 2007 presentation.~~

~~13.~~The financial statements are prepared in accordance with the provisions of Statement of Financial Accounting ~~Standard~~Standards ~~Board~~(SFAS) ~~Interpretation~~No. 71 – "Accounting for the Effects of Certain Types of Regulation". SFAS No. 4871 recognizes that accounting for rate-regulated enterprises should reflect the relationship of costs and revenues introduced by rate regulation. A regulated utility may defer recognition of a cost (a regulatory asset) or show recognition of an obligation (a regulatory liability) if it is probable that, through the ratemaking process, there will be a corresponding increase or decrease in revenues. The Company has recognized certain regulatory assets and liabilities in the condensed consolidated balance sheets.

~~The~~As a result, Florida Public Service Commission (FPSC) regulation ~~Company~~has ~~accounts~~a ~~for~~significant ~~uncertainty~~effect inon ~~income~~the ~~taxes~~Company’s inresults ~~accordance~~of ~~with~~operations. ~~FASB~~The FPSC ~~Interpretation~~approves ~~No.~~rates ~~48,~~that ~~Accounting~~are ~~for~~intended ~~Uncertainty~~to inpermit ~~Income~~a ~~Taxes~~specified ~~(FIN~~rate ~~48) and SFAS~~of Noreturn on investment. ~~109,~~Rate ~~Accounting~~tariffs ~~for~~allow ~~Income~~the ~~Taxes.~~flexibility ~~The~~of ~~Company~~automatically ~~performed~~passing ~~an analysis~~through the cost of ~~tax~~ ~~positions~~natural ~~taken~~gas and ~~expected~~electricity to becustomers. ~~taken~~Increases onin the ~~tax~~operating expenses ~~returns.~~of ~~The~~the ~~analysis concluded~~regulated ~~that~~segments ~~the~~may ~~Company~~require ~~had~~a norequest ~~material~~for ~~uncertain~~increases ~~tax~~in the ~~positions~~rates charged to customers.

The ~~Interpretation~~ ~~requires~~FPSC ~~Companies~~approved toan ~~accrue~~annual ~~interest~~electric ~~and~~final ~~penalties~~rate ~~that~~increase ~~would~~of ~~be incurred~~approximately if$3.9 anmillion ~~uncertain~~effective ~~tax~~May ~~position~~22, ~~ultimately~~2008. Interim ~~were~~rate ~~not~~relief ~~sustained. In~~for ~~such~~partial arecovery ~~case,~~of the ~~Company~~increased ~~would~~expenditures ~~start~~was ~~accruing~~approved ~~interest~~by ~~and~~the ~~penalty~~FPSC inon October ~~the~~23, ~~period which~~2007. ~~gives~~Interim ~~rise~~rates towere ~~the~~effective ~~uncertain~~in ~~tax~~November ~~position.~~of ~~The~~2007 ~~Company~~up ~~would~~until ~~classify~~May ~~interest~~22, ~~and~~2008, ~~penalties in~~ the ~~income~~date ~~statement~~our ~~and~~final ~~balance~~rates ~~sheet~~went ~~separately from other~~into ~~tax~~effect ~~balances~~ and ~~based~~produced onadditional annual ~~expected~~revenues ~~timing~~ of ~~cash~~approximately ~~payment to the taxing authorities~~$800,000.

~~Under the tax~~The ~~statute~~Company’s ofnatural ~~limitations~~gas ~~applicable~~segment toreceived ~~the~~interim ~~Internal~~rate ~~Revenue~~relief ~~Code and state~~for ~~taxes,~~partial werecovery ~~are no longer subject to examinations by the Internal Revenue Service or the State~~ of ~~Florida~~increased ~~for years before 2003~~expenditures. ~~However,~~Interim ~~because~~rates wewhich ~~are~~will ~~carrying~~produce ~~forward~~additional ~~income~~annual ~~tax~~revenues ~~attributes,~~of ~~such~~approximately as$1 ~~net operating losses and tax credits~~million ~~from 2002~~went ~~and~~into ~~earlier~~effect ~~tax years, these attributes can still be audited when utilized~~ on ~~returns~~March ~~filed~~12, in2009 ~~the~~up ~~future. As~~until ~~noted~~June in4, ~~Note 14~~2009, wewhen ~~have been~~final ~~notified~~rates ofwill anbe ~~IRS audit~~effective.

144. ~~IRS Examination~~

InPledged February of 2007, the IRS informed us that it has selected our 2003 and 2004 tax years for examination. As our tax positions have remained consistent with those from the previously audited tax years, we do not expect any material adverse findings as the result of the impending IRS audit.Assets

15Substantially all of the Company’s utility plant and the shares of its wholly owned subsidiary, Flo-Gas Corporation, collateralize the Company’s First Mortgage Bonds (long-term debt). Cash, ~~Employee~~accounts ~~Benefit~~receivable ~~Plans~~and inventory are collateral for the line of credit.

The Company sponsors a qualified defined benefit pension plan for non-union employees that were hired before January 1, 2005 and for unionized employees that work under one of the six Company union contracts and were hired before their respective contract dates in 20055. ~~The Company also sponsors a postretirement medical plan.~~

~~The~~Restriction ~~following~~on ~~table provides the components of the net periodic benefit cost for our pension plan and postretirement benefit plan for the three and six months ended June 30, 2006 and 2007.~~Dividends

~~Index~~The Company’s Fifteenth Supplemental Indenture of Mortgage and Deed of Trust restricts the amount that is available for cash dividends. At March 31, 2009, approximately $10.2 million of retained earnings were free of such restriction and available for the payment of dividends. The Company’s line of credit agreement contains covenants that, if violated, could restrict or prevent the payment of dividends. The Company is not in violation of these covenants.

FLORIDA PUBLIC UTILITIES COMPANY
Net Periodic Benefit Costs
(Dollars in thousands)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2007			2006			2007			2006
Pension Plan:
Service Cost	$	283		$	308		$	566		$	616
Interest Cost		566			524			1,132			1,048
Expected Return on Plan Assets		(610	)		(603	)		(1,220	)		(1,206	)
Amortization of Prior Service Cost		184			184			368			368
Net Periodic Pension Cost	$	423		$	413		$	846		$	826
Postretirement Benefit Plan:
Service Cost	$	16		$	25		$	32		$	50
Interest Cost		26			34			52			68
Amortization of Transition Obligation/(Asset) Obligation/(Asset)		11			11			22			22
Amortization of Net (Gain) or Loss		(5	)		-			(10	)		-
Net Periodic Postretirement Benefit Cost	$	48		$	70		$	96		$	140

~~For~~Allowance ~~additional~~for ~~information~~Uncollectible ~~related to our employee benefit plans, please see Note 12 to the Consolidated Financial Statements of the Company’s 10-K Annual Report.~~Accounts

~~In September,~~The ~~2006,~~Company ~~the~~records ~~FASB~~an ~~issued~~allowance ~~Statement~~for ~~No.~~uncollectible ~~158~~accounts ~~“Employers’ Accounting for~~based ~~Defined~~on ~~Benefit~~historical ~~Pension~~information and ~~Other~~trended ~~Postretirement~~current ~~Plans”.~~economic ~~Statement 158 requires~~conditions. The ~~the~~following ~~Company~~is toa ~~show~~summary ~~the funded status~~ of ~~its~~bad ~~pension~~debt ~~and~~activity ~~retiree~~for ~~health care plan as a prepaid asset or accrued liability, and to show~~ the ~~net~~first ~~deferred and unrecognized~~quarter ~~gains and losses related to the retirement plans, net of tax,~~ as ~~part~~ of ~~accumulated other comprehensive income (AOCI) in shareholders’ equity.~~March ~~Previously, the net deferred and unrecognized gains and losses were netted in the prepaid asset or accrued liability recorded for the retirement plans.~~31:

The Company initially adopted Statement 158 at December 31, 2006, as required and presented in the statement of shareholder’s equity in the most recent 10-K. This resulted in a transition adjustment, a loss, of $103,000 to the AOCI and was reported as a current adjustment in the statement of comprehensive income as opposed to an adjustment directly to AOCI. There were no other related or unrelated AOCI adjustments or balances prior to this adjustment. The accumulated other comprehensive income (AOCI) as of June 30, 2007 is summarized as follows:


Allowance for Doubtful Accounts
(Dollars in thousands)
	2009	2008
Bad Debt Write-offs	$187	$114
Bad Debt Provision	$309	$187

~~Index~~7.

Statement of Accumulated Other Comprehensive Income (AOCI) (Dollars in thousands)
Balance at December 31, 2005	$	-
Adjustment to ACOI:
Retirement obligations, net of tax		(103	)
Balance at December 31, 2006		(103	)
Adjustment to AOCI:
Retirement obligations, net of tax		50
Balance at June 30, 2007		(53	)

Storm Reserves

~~Item~~As of March 31, 2009, the Company had a storm reserve of 2approximately $1. ~~Management’s~~7 ~~Discussion~~million ~~and~~for ~~Analysis~~the ofelectric ~~Financial Condition~~segment and ~~Results~~approximately of$789,000 for ~~Operations~~the natural gas segment. The Company does not have a storm reserve for the propane gas segment.

~~Overview~~8.

WeGoodwill ~~have three primary business segments: natural gas, electric~~ and ~~propane~~Other ~~gas.~~Intangible ~~The Florida Public Service Commission (FPSC) regulates the natural gas and electric segments.~~Assets

~~Earnings for~~The ~~2007~~Company ~~are~~does ~~down~~not ~~significantly~~amortize ~~for~~goodwill ~~the~~or ~~quarter~~intangibles ~~and for the year to date~~with ~~compared~~indefinite tolives. ~~2006~~The ~~primarily~~Company ~~because~~periodically oftests ~~milder~~the ~~weather. The~~applicable ~~mild~~reporting ~~weather~~segments, ~~caused sales for all operating units –~~ natural gas, ~~electric~~ and propane to ~~be significantly under budget~~gas, ~~thereby~~for ~~lowering income~~impairment. We ~~also believe~~In ~~that~~the ~~conservation~~event ~~measures~~goodwill ~~taken~~or intangible byassets ~~our~~related ~~customers~~to as a ~~result~~segment ofare ~~higher electric~~determined ~~rates contributed~~ to ~~the~~be ~~decrease in electric sales. In addition~~impaired, ~~over~~ the ~~past few years the housing market and construction industry~~ inCompany ~~Florida~~would ~~has~~write ~~slowed~~ down ~~and~~such ~~caused~~assets ~~our growth rate~~ to befair ~~less than originally anticipated~~value. ~~Growth in customers helps increase revenue and usually offsets many of the expense increases.~~

~~We experienced~~Goodwill ~~appreciably~~associated ~~higher~~with ~~than~~the ~~usual~~Company’s ~~general~~acquisitions ~~liability~~consists ~~claims this year as cases were settled in 2007. The number~~ of ~~claims was atypical related to our~~ ~~gas business and these increased expenses in 2007 by approximately~~ $~~300~~550,000 ~~and decreased~~in ~~earnings per share approximately $.03 over~~ the ~~prior~~natural ~~year~~gas tosegment ~~date. Management expects claims to return to normal levels for the remainder of 2007. Sarbanes Oxley requirements continue to increase our legal fees~~ and ~~accounting costs~~$1.9 ~~These~~million ~~costs~~in ~~have increased significantly over~~ the ~~last~~propane ~~five~~gas ~~years for public companies and continue to negatively impact our earnings~~segment. ~~Another item~~ ~~lowering~~The ~~our~~summary ~~earnings~~of ~~was~~intangible aassets ~~revision~~at inMarch ~~our~~31, ~~estimate~~2009, ~~for~~and ~~2005~~December ~~natural~~31, ~~gas over-earnings~~2008, ~~which~~is ~~decreased our net income for 2007 by $53,000.~~as follows:

We expect a revenue increase beginning in late 2007 and additional increases in early 2008 as a result of our upcoming electric rate proceeding, which is expected to be filed with the Florida Public Service Commission (FPSC) in the third quarter of 2007. Management is requesting recovery for many of the increases in our electric expenses as well as for additional costs to implement new requirements from the FPSC to strengthen power delivery systems in order to minimize damage caused by hurricanes.


Intangible Assets (Dollars in thousands)
		March 31, 2009	December 31, 2008
Customer distribution rights	(Indefinite life)	$ 2,800	$ 2,800
Software	(Five to nine year life)	3,575	3,542
Accumulated amortization		(2,391)	(2,284)
Total intangible assets, net of amortization		$ 3,984	$ 4,058

~~Index~~The amortization expense of intangible assets was approximately $108,000 and $104,000 for the three months ended March 31, 2009 and 2008, respectively.

~~Results of Operations~~9.

~~Revenues~~Over-earnings ~~and~~– ~~Gross~~Natural ~~Profit~~Gas ~~Summary~~Segment

~~Revenues include cost recovery revenues.~~ The FPSC ~~allows~~approves ~~cost~~rates ~~recovery~~that ~~revenues~~are intended to ~~directly~~ ~~recover~~permit ~~costs~~a ~~of fuel, conservation and revenue-based taxes in our~~specified ~~natural~~rate ~~gas~~of ~~and~~return ~~electric~~on ~~segments.~~investment ~~Revenues collected for these costs~~ and ~~expenses~~ ~~have~~limits nothe ~~effect~~maximum onamount ~~results~~ of ~~operations~~earnings ~~and fluctuations could distort~~of ~~the~~regulated ~~relationship of revenues between periods~~operations. ~~Gross~~The ~~profit~~Company ishas ~~defined~~agreed aswith ~~gross operating~~the ~~revenues~~FPSC ~~less fuel, conservation and revenue-based taxes that are passed directly through~~ to ~~customers.~~limit ~~Because~~the ~~gross profit eliminates these~~earned ~~cost recovery~~return ~~revenues,~~on weequity ~~believe it provides a more meaningful basis~~ for ~~evaluating utility~~regulated ~~revenues.~~natural ~~The following summary compares gross profit between periods and units sold in one thousand Dekatherm (MDth) (~~gas) and ~~Megawatt Hour (MWH) (~~electric) operations.

Revenues and Gross Profit
(Dollars and units in thousands)	Three Months Ended June 30,				Six Months Ended June 30,
	2007		2006		2007		2006
Natural Gas
Revenues	$	15,502	$	14,632	$	36,075	$	41,586
Cost of fuel and other pass through costs		9,168		8,402		21,690		26,957
Gross Profit	$	6,334	$	6,230	$	14,385	$	14,629
Units sold: (MDth)		1,447		1,402		3,287		3,348
Customers (average for the period)		51,737		51,347		51,747		51,254
Electric
Revenues	$	13,135	$	11,815	$	26,493	$	23,511
Cost of fuel and other pass through costs		9,590		8,243		19,489		16,516
Gross Profit	$	3,545	$	3,572	$	7,004	$	6,995
Units sold: (MWH)		200,298		216,392		385,934		413,619
Customers (average for the period)		31,066		30,605		31,004		30,541
Propane Gas
Revenues	$	3,831	$	3,528	$	8,512	$	8,288
Cost of fuel		1,941		1,831		4,289		4,216
Gross Profit	$	1,890	$	1,697	$	4,223	$	4,072
Units sold: (MDth)		143		147		335		347
Customers (average for the period)		13,274		12,974		13,327		12,964
Consolidated
Revenues	$	32,468	$	29,975	$	71,080	$	73,385
Cost of fuel		20,699		18,476		45,468		47,689
Gross Profit	$	11,769	$	11,499	$	25,612	$	25,696
Customers (average for the period)		96,077		94,926		96,078		94,759

All prior over-earnings have been settled. Management does not anticipate any electric or natural gas over earnings for 2007, 2008 or 2009.

~~Index~~10.

~~Three~~Environmental ~~Months Ended June 30, 2007 Compared with Three Months Ended June 30, 2006.~~Contingencies

~~Revenues~~The Company is subject to federal and state legislation with respect to soil, groundwater and ~~Gross~~employee ~~Profit~~health and safety matters and to environmental regulations issued by the Florida Department of Environmental Protection (FDEP), the United States Environmental Protection Agency (EPA) and other federal and state agencies. Except as discussed below, the Company does not expect to incur material future expenditures for compliance with existing environmental laws and regulations.

Natural Gas


(Dollars in thousands)
Site	Range From	Range To
West Palm Beach	$ 4,851	$ 18,332
Sanford	637	637
Pensacola and Key West	120	120
Total	$ 5,608	$ 19,089

~~Natural gas~~The ~~service~~Company ~~revenues~~currently ~~increased~~has by $~~870,000~~13.4 inmillion ~~the~~recorded ~~second~~as ~~quarter~~our best estimate of ~~2007 over~~ the ~~same~~environmental ~~period~~liability. inThe ~~2006. Revenues~~FPSC approved up to ~~recover~~$14 ~~our~~million ~~cost~~for total ofrecovery ~~fuel~~from insurance and rates based on the original 2005 projections ~~other~~as ~~costs~~a ~~passed~~basis ~~through~~for torate ~~customers~~recovery. ~~increased~~The byCompany has recovered a total of $~~766,000~~6. ~~These~~4 million from insurance and rate recovery, net of costs doincurred ~~not~~to ~~impact~~date. The remaining ~~our~~balance ~~gross~~of ~~profit~~$7 million is recorded as a regulatory asset. On October ~~Our~~18, ~~gross~~2004 ~~profit~~the ~~increased~~FPSC approved recovery of $~~104,000~~9.1 ormillion for environmental 2%liabilities. The ~~increase~~amortization inof ~~gross~~this ~~profit~~recovery isand ~~attributable~~reduction to athe regulatory 3%asset ~~increase~~began ~~in units~~on ~~sold~~January ~~in 2007~~1, ~~due~~2005. ~~primarily~~The majority of environmental cash expenditures is expected to abe 1%incurred ~~increase~~before in2012, ~~customer~~but may continue for ~~growth~~another 9 years.

~~Electric~~West Palm Beach Site

~~Electric service~~The ~~revenues~~Company ~~increased~~is bycurrently ~~$1,320,000~~evaluating inremedial ~~the~~options ~~second~~to ~~quarter~~respond ofto environmental ~~2007~~impacts ~~over the same~~to ~~period~~soil inand ~~2006. Primarily~~groundwater ~~all~~at ofand in the ~~increase~~immediate ~~was attributable~~vicinity toof ~~the~~a ~~cost~~parcel of ~~fuel~~property ~~and~~owned ~~other~~by ~~costs~~us ~~that~~in ~~were~~West ~~passed~~Palm ~~through~~Beach, toFlorida ~~customers. A~~upon ~~new~~which we ~~fuel~~previously ~~contract~~operated ina ~~our~~gasification ~~Northeast~~plant. ~~division~~Pursuant ~~was~~to ~~effective~~a ~~January~~Consent 1,Order ~~2007 and this~~between ~~increased~~ the ~~cost~~Company ofand ~~fuel~~the ~~that~~Florida ~~was~~Department ~~passed~~of ~~through~~Environmental toProtection ~~our customers. Gross~~effective ~~profit~~April ~~was~~8, ~~flat~~1991, ~~compared to~~ the ~~second~~Company ~~quarter~~completed ofthe ~~2006. Despite~~delineation ~~an increase~~ of 2%soil inand ~~customer~~groundwater impacts ~~growth,~~at the ~~usage~~site. ~~per~~On ~~customer~~June ~~decreased by 5%~~30, ~~excluding~~ ~~our industrial customers~~2008, ~~due~~the toCompany ~~weather~~transmitted ~~and~~a ~~possible conservation~~revised ~~measures~~feasibility ~~taken~~study, byevaluating ~~our~~appropriate ~~customers~~remedies asfor athe ~~result~~site, ofto the ~~recent~~Florida Department ~~fuel~~of ~~cost increases~~Environmental Protection.

~~Propane~~The feasibility study evaluated a wide range of remedial ~~Gas~~alternatives based on criteria provided by applicable laws and regulations. The total costs for the remedies evaluated in the feasibility study ranged from a low of $2.8 million to a high of $54.6 million. Based on the likely acceptability of proven remedial technologies described in the feasibility study and implemented at similar sites, management believes that consulting/remediation costs to address the impacts now characterized at the West Palm Beach site will range from $4.4 million to $17.9 million. This range of costs covers such remedies as in situ solidification for deeper soil impacts, excavation of surficial soil impacts, installation of a barrier wall with a permeable biotreatment zone, monitored natural attenuation of dissolved impacts in groundwater, or some combination of these remedies. The feasibility study proposed a remedy of surficial soil excavation, installation of a hanging barrier wall with permeable biotreatment zone, and monitored natural attenuation, the cost of which is projected to range from $4.4 million to $9.4 million.

~~Propane revenues~~Negotiations ~~increased~~between ~~$303,000~~the inCompany and the ~~second~~Florida ~~quarter~~Department of Environmental ~~2007~~Protection ~~compared~~on toa final remedy for the ~~same~~site continue. Prior to the ~~period~~conclusion inof ~~2006. Although~~those negotiations, we ~~experienced~~are unable to determine, to a 3%reasonable degree ~~decrease~~of incertainty, ~~units~~the ~~sold~~complete extent or cost of remedial action that may be required. As of March 31, 2009, and subject to ~~customers this~~the ~~was~~limitations ~~offset~~described byabove, management ~~increased~~believes ~~profit~~the ~~margins~~Company's remediation expenses, including attorneys' fees and costs, will range from approximately $4.9 million to $18.3 million for this site.

~~Operating~~Sanford ~~Expenses~~Site

~~Operating expenses~~The ~~were~~Company ~~higher~~owns bya ~~$739,000~~parcel of property located in ~~the~~Sanford, ~~second~~Florida, upon ~~quarter~~which ofa ~~2007~~gasification ~~compared~~plant was operated prior to our acquisition of the ~~same~~property. ~~period~~On inMarch ~~2006.~~25, ~~Administrative~~1998, ~~and~~the ~~general~~Company ~~expenses~~executed ~~increased~~an ~~$425,000~~Administrative Order on ~~primarily~~Consent ~~due~~with tothe anfour ~~increase~~former inowners ~~recent~~and ~~unusual~~operators ~~general~~(collectively, ~~liability~~the ~~claims.~~"Group") ~~Management~~and ~~expects~~the ~~claims~~United toStates ~~return~~Environmental Protection Agency that obligated the Group to implement a ~~normal~~Remedial ~~level~~Investigation/Feasibility ~~for~~Study ~~the~~and ~~remainder~~to ~~of 2007. Additionally,~~pay wethe ~~incurred~~United States ~~increased~~Environmental ~~expenses~~Protection ~~from~~Agency's ~~cost~~past ofand ~~living~~future ~~raises~~oversight ~~and~~costs. The ~~increased~~Group ~~payroll~~also ~~expense~~entered ~~for~~into ~~additional~~a ~~staff~~Participation ~~hired~~Agreement toand ~~improve~~an ~~natural~~Escrow ~~gas~~Agreement on or ~~customer~~about ~~service~~April ~~and~~13, ~~collections~~1998. ~~Customer~~Work ~~account~~under ~~expenses~~the ~~increased~~Remedial ~~$129,000~~Investigation/Feasibility Study inAdministrative ~~the~~Order ~~second~~on ~~quarter~~Consent ofand ~~2007~~Participation asAgreement aand ~~result~~an ofEscrow Agreement ~~increased~~is ~~costs~~now incomplete ~~meter readings~~ and ~~higher~~the ~~bad~~Company ~~debt~~has ~~expenses~~no further obligations under either document.

~~Other~~In 2008, a revised Consent Decree was signed by all Group Members ~~Income~~and the United States Environmental Protection Agency, providing for the implementation by the Group of the remedies the United States Environmental Protection Agency approved earlier for the site, which are set forth in the Records of Decision for Operable Units 1-3, and ~~Deductions~~for the payment of the United States Environmental Protection Agency's past and future oversight costs. The Consent Decree was entered by the federal Court in Orlando and became effective on January 15, 2009; the parties to the Consent Decree are now obligated to implement the remedy approved by United States Environmental Protection Agency for the site.

~~Merchandise~~ In January 2007, the Company and ~~service~~other ~~revenue~~members ~~decreased~~of bythe ~~$338~~Group signed a Third Participation Agreement,~~000~~ inwhich provides for funding the ~~second~~remediation ~~quarter~~work specified in the Records of ~~2007~~Decision ~~compared~~for Operable Units 1-3 and supersedes and toreplaces the ~~same~~Second ~~period~~Participation ~~last year~~Agreement. The ~~This~~Company's ~~was~~share ~~offset~~of remediation bycosts aunder ~~decrease~~the inThird ~~cost~~Participation Agreement is set at 5% of a ~~merchandise~~maximum ~~and~~of ~~services~~$13 ofmillion, or $~~337~~650,000. ~~The~~To ~~decrease~~date, inthe ~~revenue~~Company ~~was~~has acontributed $100,000 ~~result~~of its total share of remediation costs under the Third Participation Agreement. It is currently anticipated that the total cost of the final remedy will exceed $13 million. The Company has advised the ~~slowdown~~other members of ~~new~~the Sanford ~~construction~~Group ~~projects~~that ~~during~~we are unwilling at this time to agree to pay any sum in excess of the ~~current~~$650,000 ~~downturn~~committed by us in the ~~housing~~ ~~market~~Third Participation Agreement.

~~The~~Several members of the Sanford Group recently concluded ~~total~~negotiations with two adjacent property owners to resolve damages that the ~~interest~~property ~~expense~~owners ~~increased~~allege ~~$97~~that they have/will incur as a result of the implementation of the EPA approved remedy. In settlement of these claims,~~000~~ members ~~compared~~of the Sanford Group (excluding the Company) have agreed to pay specified sums of money to the ~~prior~~parties. ~~quarter~~In ~~primarily~~one case, the settlement agreement ~~due~~ requires the select members of the Sanford Group to purchase the ~~revised~~third ~~estimate~~party's property infor approximately $2 million; the ~~second~~third ~~quarter~~party then has an option to buy back the property after completion of ~~2007~~the remedy for ~~our~~approximately ~~natural~~the ~~gas~~same ~~over-earnings~~amount. ~~from~~In ~~2005~~the other case, ~~and~~the select members agreed to a lump sum payment of $450,000. The Company has refused to participate in the ~~related~~funding ~~interest~~of ~~expense~~the third party settlement agreements based on ~~our~~the ~~projected~~contention that it did not contribute ~~over-earnings~~to the release of hazardous substances at the site giving rise to the third party claims.

~~Income~~As of March 31, 2009, the Company’s share of remediation expenses, ~~Taxes~~including the Company’s attorneys' fees and costs, are projected to be approximately $637,000 for this site. However, at this time, we are unable to determine, to a reasonable degree of certainty, whether the other members of the Sanford Group will accept the Company’s asserted defense to liability for costs exceeding $13 million to implement the final remedy for the site or will pursue a claim against the Company for a sum in excess of the $650,000 that FPUC has committed to fund the remedy.

~~Income~~Pensacola ~~tax expense decreased in the second quarter of 2007 by $227,000 over the same period last year; primarily due to lower taxable income.~~Site

~~Index~~The Company is the prior owner/operator of the former Pensacola gasification plant, located at the intersection of Cervantes Street and the Louisville and Nashville (CSX) Railroad line, Pensacola, Florida. Following notification on October 5, 1990, that the Florida Department of Environmental Protection had determined that the Company was one of several responsible parties for any environmental impacts associated with the former gasification plant site, the Company entered into cost sharing agreements with three other responsible parties providing for the funding of certain contamination assessment activities at the site.

~~Six~~Following field investigations performed on behalf of the ~~Months~~responsible ~~Ended~~parties, ~~June~~on 30July 16, ~~2007~~1997, ~~Compared~~the ~~with~~Florida ~~Six~~Department ~~Months~~of ~~Ended~~Environmental Protection ~~June~~approved 30a final remedy for the site that provides for annual sampling of selected monitoring wells. Such annual sampling has been undertaken at the site since 1998. The Company's share of these costs is less than $2,000 ~~2006~~annually.

~~Revenues~~In March 1999, the United States Environmental Protection Agency requested site access in order to undertake an Expanded Site Inspection. The Expanded Site Inspection was completed by the United States Environmental Protection Agency's contractor in 1999 and ~~Gross~~an ~~Profit~~Expanded Site Inspection Report was transmitted to the Company in January 2000. The Expanded Site Inspection Report recommends additional work at the site. The responsible parties met with the Florida Department of Environmental Protection on February 7, 2000 to discuss the United States Environmental Protection Agency's plans for the site. In February 2000, the United States Environmental Protection Agency indicated preliminarily that it will defer management of the site to the Florida Department of Environmental Protection; as of July 31, 2008, the Company has not received any written confirmation from the United States Environmental Protection Agency or the Florida Department of Environmental Protection regarding this matter. Prior to receipt of the United States Environmental Protection Agency's written determination regarding site management, we are unable to determine whether additional field work or site remediation will be required by the United States Environmental Protection Agency and, if so, the scope or costs of such work.

~~Natural~~As of March 31, 2009, the Company’s share of remediation expenses ~~Gas~~for the site, including attorney’s fees and costs, are projected to be approximately $27,000.

~~Natural gas~~Key ~~service~~West revenues decreased $5,511,000 in the six months ended June 30, 2007 over the same period in 2006. As the cost of natural gas continues to decline, revenues to recover our cost of fuel and other costs passed through to customers decreased by $5,267,000. These costs do not impact our gross profit. Our gross profit decreased by $244,000 or 2%. The decrease in gross profit is attributable to a 2% decrease in units sold in 2007 due primarily to warmer weather resulting in lower usage per customer. The down-turn in the housing market has also impacted the growth in the number of new residential customers.Site

~~Electric~~Between 1927 and 1938, the Company owned and operated a gasification plant on Catherine Street, in Key West, Florida. The plant discontinued operations in the late 1940s; the property on which the plant was located is currently used for a propane gas distribution business. In March 1993, a Preliminary Contamination Assessment Report was prepared by a consultant jointly retained by the Company and the current site owner and was delivered to the Florida Department of Environmental Protection. The Preliminary Contamination Assessment Report reported that very limited soil and groundwater impacts were present at the site. By letter dated December 20, 1993, the Florida Department of Environmental Protection notified the Company that the site did not warrant further "CERCLA consideration and a Site Evaluation Accomplished disposition is recommended." the Florida Department of Environmental Protection then referred the matter to its Marathon office for consideration of whether additional work would be required by the Florida Department of Environmental Protection's district office under Florida law. As of March 31, 2009, the Company has received no further communication from the Florida Department of Environmental Protection with respect to the site. At this time, we are unable to determine whether additional field work will be required by the Florida Department of Environmental Protection and, if so, the scope or costs of such work. In 1999, the Company received an estimate from its consultant that additional costs to assess and remediate the reported impacts would be approximately $166,000. As of March 31, 2009 and assuming the current owner shared in such costs according to the allocation agreed upon by the parties for the Preliminary Contamination Assessment Report, the Company's share of remediation expenses, including attorneys' fees and costs, is projected to be $93,000 for this site.

~~Electric service revenues increased by $2,982,000 in the six months ended June 30, 2007 over the same period in 2006~~11. Primarily all of the increase was attributable to the cost of fuel and other costs that were passed through to customers. A new fuel contract in our Northeast division was effective January 1, 2007 and this increased the cost of fuel that was passed through to our customers. Gross profit was flat compared to the six months ending June 30, 2006. Although the number of customers increased by 2%, there was a 6.7% decrease in units sold as a result of warmer weather and possible conservation measures taken by our customers due to the recent fuel increases.

~~Propane~~Employee ~~Gas~~Benefit Plans

~~Propane~~The Company sponsors a qualified defined benefit pension plan for ~~revenues~~non-union ~~increased~~employees byhired ~~$224~~before January 1,~~000~~ in2005 and for union employees who work under one of the six ~~months~~Company ~~ended~~union ~~June~~contracts ~~30,~~and ~~2007~~were ~~compared~~hired before their ~~to the~~respective ~~same~~contract ~~period~~dates in ~~2006. Although~~2005 wefor ~~experienced~~our aNorthwest ~~3.5%~~division ~~decrease~~contract in 2006. ~~units~~Employees ~~sold~~hired toafter ~~customers due~~the above time frames along with those that elected to transfer ~~warmer~~out ~~weather;~~of ~~this~~the ~~was~~defined ~~offset~~benefit bypension ~~increased~~plan are not eligible for the ~~profit~~defined ~~margins~~benefit pension plan and are in a 401k match plan. The Company also sponsors a post-retirement medical plan.

~~Operating~~In March 2009, the Company's Board of Directors authorized ~~Expenses~~amendments to the pension plan in an effort to reduce anticipated future pension expenses. As a result of these amendments, the Company will freeze the pension plan for all participants effective December 31, 2009. All future benefit accruals under the plan shall cease, including freezing salary rates at 2009 average compensation levels as of December 31, 2009. In addition to the freeze, the reduced early retirement eligibility will be lowered from 30 years to 20 years and two additional service years can be earned by active participants at the December 31, 2009 average compensation levels for the purposes of benefit accrual, vesting and retirement eligibility. The two additional service years will increase annual pension cost by $800,000 in each of the next two years. Beyond December 31, 2011, active participants will continue to accrue service years for the purposes of vesting and retirement eligibility. The amendments to the plan have been accounted for in accordance with SFAS No. 88, Employers' Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits, resulting in the recognition of approximately $2.7 million in non-cash pretax curtailment loss of which $2.3 million is reflected in expenses and $400,000 is reflected on the balance sheet in the Company's consolidated statements.

~~Operating expenses~~The ~~were~~following ~~higher~~table byprovides ~~$1,175,000 in~~ the ~~six~~components ~~months ended June 30, 2007 compared to the same period in 2006. Administrative and general increased by $558,000; approximately $300,000~~ of the ~~increase~~net ~~was due to recent unusual~~periodic ~~general~~benefit ~~liability~~cost ~~claims~~for inour ~~the~~pension ~~second~~plan ~~quarter~~and ofpostretirement ~~2007.~~benefit ~~Management~~plan ~~expects claims to return to normal levels~~ for the ~~remainder of 2007. Additionally,~~three ~~we incurred~~months ~~increased~~ended ~~expenses~~March ~~of $325~~31,~~000~~ ~~from~~2009 ~~cost of living raises~~ and ~~increased payroll expense for additional staff hired to improve natural gas customer service and collections~~2008. ~~Similarly,~~ customer account expenses increased by $239,000 as a result of increased costs in meter readings and higher bad debt expenses. As the divisions continue to grow, capital additions contributed to $200,000 in increased depreciation expense.

Other Income and Deductions


FLORIDA PUBLIC UTILITIES COMPANY
Net Periodic Benefit Costs
(Dollars in thousands)

	Three Months Ended
	March 31,
	2009	2008

Pension Plan:
Service Cost	$257	$273
Interest Cost	694	642

Merchandise and service revenue decreased by $649,000 in the six months ended June 30, 2007 compared to the same period last year. This was offset by a decrease in cost of merchandise and services of $712,000. The decrease in revenue was a result of the slow down of new construction projects during the current downturn in the housing market.


Expected Return on Plan Assets	(634)	(648)
Amortization of Net Gain	54	-
Amortization of Prior Service Cost	179	184
Total FAS 87 Net Periodic Pension Cost	550	451
Curtailment Loss	2,722	-
Net Periodic Pension Cost	$3,272	$451

Postretirement Benefit Plan:
Service Cost	$13	$14
Interest Cost	26	25
Amortization of Transition Obligation	11	11
Amortization of Net Gain	(13)	(13)
Net Periodic Postretirement Benefit Cost	$37	$37

~~Index~~For additional information related to our employee benefit plans, please see Notes to Consolidated Financial Statements in the Company’s Form 10-K for the year ended December 31, 2008.

~~The~~FASB issued Statement No. 158, “Employers’ Accounting for Defined ~~total~~Benefit Pension and Other Postretirement Plans” that requires the Company to ~~interest~~show ~~expense~~the ~~increased~~funded ~~$51~~status of its pension and retiree health care plan as a prepaid asset or accrued liability,~~000~~ ~~compared~~and to show the ~~prior~~net ~~year~~deferred toand ~~date~~unrecognized ~~primarily~~gains ~~due~~and losses related to the ~~revised~~retirement ~~estimate~~plans, innet ~~the~~of ~~second~~tax, ~~quarter~~as part of ~~2007~~accumulated other ~~for~~comprehensive ~~our~~income ~~natural~~(loss) ~~gas~~(AOCI) in shareholders’ equity. This resulted in a gain in AOCI, net of deferred tax, ~~overearnings~~of ~~from~~approximately ~~2005~~$1,138,000 and ~~the~~$22,000 ~~related~~as ~~interest~~of ~~expense~~March 31, on2009 ~~our~~and ~~projected overearnings~~March 31, 2008, respectively.

~~Income Taxes~~12.

~~Income~~Impact ~~tax~~of ~~expense~~Recent ~~decreased~~Accounting ~~in the six months ended June 30, 2007 by $484,000 over the same period last year primarily due to lower taxable income.~~Standards

~~Liquidity~~Financial ~~and~~Accounting ~~Capital~~Standard ~~Resources~~No. 161

~~Cash~~In March 2008, the FASB issued Statement No. 161, “Disclosures ~~Flows~~about Derivative Instruments and Hedging Activities – an amendment of FASB Statement No. 133” This standard requires enhanced disclosures about an entity’s derivative and hedging activities and thereby improves the transparency of financial reporting. This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The Company adopted SFAS No. 161 effective January 1, 2009. The adoption of SFAS No. 161 did not have an impact on the Company’s disclosures.

~~Operating~~FASB ~~Activities~~Staff Position, FAS No. 142-3

~~Net~~In April 2008, the FASB issued FASB Staff Position, or “FSP”, FAS ~~cash flow~~142-3, ~~provided~~“Determination byof ~~operating~~the ~~activities~~Useful Life of Intangible Assets,” effective for financial ~~the~~statements ~~six~~issued ~~months~~for ~~ended~~fiscal ~~June~~year 30beginning after December 15, ~~2007~~2008, ~~decreased~~and byinterim ~~approximately~~periods $5within those fiscal years.2 ~~million~~This ~~over~~FSP amends the ~~same~~factors ~~period~~that should be considered in ~~2006.~~developing ~~The over-recovered~~renewal ~~fuel~~or ~~costs~~extension inassumptions ~~2006~~used ~~and~~to determine the ~~related~~useful ~~reduction~~life inof ~~fuel~~a ~~costs~~recognized ~~and~~ intangible asset under~~-recovered~~ ~~fuel~~SFAS ~~costs~~No. 142 “Goodwill and Other Intangible Assets,” thereby resulting in ~~2007~~improved consistency ~~accounted~~between ~~for~~the ~~approximately~~useful $6life applied under SFAS No.8 ~~million~~142, and the period of expected cash flows used to measure the ~~decrease~~fair invalue of the ~~current~~asset ~~year’s~~under ~~net~~SFAS No. ~~cash~~141R, ~~flow~~“Business asCombinations.” ~~compared~~We toadopted ~~the~~FSP ~~prior~~FAS 142-3 effective January 1, ~~year~~2009. The adoption of FSP, FAS No. 142-3 did not have a material effect on our results of operations or financial position.

~~Investing~~Financial ~~Activities~~Accounting Standard No. 162

~~Construction~~In May 2008, the FASB issued Statement No. 162, “The Hierarchy of ~~expenditures~~Generally ~~did~~Accepted ~~not~~Accounting ~~fluctuate~~Principles”. This ~~significantly~~standard inoffers guidance on the ~~six~~principles ~~months~~used ~~ended~~to ~~June~~prepare ~~30,~~financial statements in accordance with GAAP. ~~2007,~~ FASB ~~decreasing~~Statements byof ~~approximately~~Financial ~~$214,000~~Accounting ~~compared~~Concepts tonow ~~the~~supersede ~~same~~industry practice. ~~period~~The ~~last~~adoption of this standard did not have an effect on our financial ~~year~~position or results of operation.

~~Financing~~FSP ~~Activities~~132(R)-1, “Employers’ Disclosure about Postretirement Benefit Plan Assets.”

~~Decreases in~~In ~~cash~~December ~~flow~~2008, ~~used~~the inFASB ~~financing~~issued ~~activities~~FSP ~~were~~FAS ~~mostly~~132(R)-1, ~~attributable~~“Employers’ Disclosures toabout ~~reductions~~Postretirement Benefit Plan Assets” (FSP FAS 132 (R)-1). FSP inFAS ~~short~~132 (R)-~~term~~1 ~~loan~~amends ~~payments. As~~FASB ofStatement ~~June~~No. 132 ~~30,~~(revised ~~2007~~2003), we“Employers’ Disclosures ~~paid~~about ~~down~~Pensions ~~our line~~and ofOther ~~credit~~Postretirement byBenefits,” ~~$2.4~~to ~~million~~provide guidance ason ~~compared~~an toemployer’s ~~$8.1~~disclosures ~~million~~about asplan assets of ~~June~~a ~~30,~~defined ~~2006.~~benefit ~~The~~pension ~~increase~~or inother ~~fuel~~postretirement ~~costs~~plan. ~~during~~FSP ~~the~~FAS ~~latter~~132 ~~part~~(R)-1 ofis ~~2005~~effective ~~resulted~~for ~~in large~~fiscal ~~fuel under-recoveries~~years ~~and~~ending ~~therefore~~after aDecember 15, ~~higher~~2009. ~~dependence~~The onCompany ~~short-term~~is ~~financing~~currently evaluating in the ~~first~~effect ~~quarter~~FSP ofFAS ~~2006~~132(R)-1 ~~compared~~will tohave ~~2007~~on its disclosures.

~~Capital~~FSP ~~Resources~~FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments.”

~~We have~~In ~~a $12~~April ~~million~~2009, ~~line~~the ofFASB ~~credit~~issued ~~(LOC),~~FSP ~~which~~FAS ~~expires~~107-1 onand ~~July~~APB 28-1, ~~2008. Upon 30 days~~Interim ~~notice~~Disclosures byabout usFair weValues ~~can increase the LOC to a maximum~~ of ~~$20~~Financial ~~million~~Instruments. ~~The~~It ~~LOC contains~~requires ~~affirmative~~the ~~and~~fair value ~~negative~~for ~~covenants~~all ~~that,~~financial ifinstruments ~~violated,~~within ~~would give~~ the ~~bank~~ ~~the~~scope ~~right to accelerate the due date~~ of ~~the~~SFAS ~~loan~~No. to107, Disclosures beabout ~~immediately~~Fair ~~payable. The~~Value ~~covenants~~of ~~include~~Financial ~~certain~~Instruments ~~financial~~(“SFAS ~~ratios~~No. ~~All~~107”), ~~ratios~~to ~~are currently within~~be ~~the~~disclosed ~~required limits and management believes we are~~ in ~~full~~the ~~compliance~~interim ~~with all covenants~~periods ~~and~~as ~~anticipates~~well ~~continued~~as ~~compliance~~ in ~~the~~annual ~~foreseeable~~financial ~~future~~statements. WeThis ~~reserve~~standard $1is ~~million~~effective offor the ~~LOC~~quarter toending ~~cover~~after ~~expenses~~June ~~for any major storm repairs in our electric segment and an additional $250~~15,~~000~~ ~~for~~2009. aWe ~~letter of credit insuring~~are ~~propane~~currently ~~facilities.~~assessing ~~As of June 30, 2007,~~ the ~~amount~~potential ~~borrowed~~impact ~~from~~that ~~the~~adoption ~~LOC~~of ~~was $1.1~~this ~~million.~~standard Atmay ~~June 30, 2007, the LOC, long-term debt and preferred stock~~have ~~comprised~~on ~~52%~~our offinancial ~~total~~statements ~~equity and debt capitalization~~disclosures.

~~Index~~SFAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments”

~~Our 1942 Indenture~~In ofApril ~~Mortgage~~2009, the FASB, issued FSP No. FAS 115-2 and ~~Deed~~FAS 124-2, Recognition and Presentation of ~~Trust~~Other-Than-Temporary Impairments, ~~which~~to isamend athe other-than-temporary ~~mortgage~~impairment onguidance ~~all~~in ~~real~~debt ~~and personal~~securities ~~property,~~to ~~permits~~be ~~the~~based ~~issuance~~on intent to sell instead of ~~additional~~ability ~~bonds~~to ~~based~~hold ~~upon~~the asecurity and to improve the ~~calculation~~presentation and disclosure of ~~unencumbered~~other-than-temporary ~~net~~impairments ~~real~~on debt and equity ~~personal~~securities ~~property~~in the financial statements. This Atpronouncement is effective for periods ending after June 3015, ~~2007,~~2009. We are currently ~~such~~assessing ~~calculation~~the ~~would~~potential ~~permit~~impact ~~the~~that ~~issuance~~adoption of ~~approximately~~this ~~$40.8~~standard ~~million~~may ofhave on our ~~additional~~financial ~~bonds~~statements.

WeFSP ~~have $3~~No. 157-4, ~~million~~“Determining inFair ~~invested~~Value ~~funds~~When ~~for~~the ~~payment~~Volume ofand ~~future~~Level ~~environmental~~of ~~costs.~~Activity Wefor the ~~expect~~Asset toor ~~incur~~Liability ~~between~~Have ~~$5.8~~Significantly ~~million~~Decreased and ~~$19.1~~Identifying ~~million through the year ending~~Transactions ~~December~~That ~~31,~~Are ~~2021~~Not ~~for expenses related to environmental clean up.~~Orderly”

~~There is over~~In $6April 2009, the FASB issued FSP No. 157-4, ~~million~~Determining inFair Value ~~receivables~~When ~~from~~ the ~~2003~~Volume ~~sale~~and Level of ~~our~~Activity ~~water~~for ~~assets,~~the ofAsset or Liability Have ~~which~~Significantly ~~estimated~~Decreased ~~installments~~and ofIdentifying ~~$300~~Transactions That Are Not Orderly,~~000~~ ~~are~~or FSP ~~anticipated~~157-4. toFSP be157-4 ~~received~~provides inadditional authoritative guidance to assist both ~~2008~~ issuers and users of financial statements in ~~2009. The~~determining ~~remaining~~whether ~~balance~~a ofmarket $5is active or inactive, and whether a transaction is distressed.8 ~~million~~The FSP will be ~~collected~~ ineffective ~~2010~~for us for the quarter ending June 30, 2009. ~~The~~ ~~present~~We ~~value~~are currently assessing the potential impact that adoption of this ~~receivable~~standard ismay ~~$5.8~~have on our ~~million~~financial statements.

~~Capital~~FSP ~~Requirements~~SFAS 141(R)-1, “Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies”

~~Portions of~~In ~~our~~April ~~business~~2009, ~~are~~FASB ~~seasonal~~issued ~~and~~FSP ~~dependent~~SFAS on141(R)-1, ~~weather~~Accounting ~~conditions~~for Assets Acquired and Liabilities Assumed in a Business Combination That Arise ~~Florida. The~~from ~~weather~~Contingencies, ~~affects~~to amend the ~~sale~~provisions ofrelated ~~electricity~~to the initial recognition and ~~gas~~measurement, subsequent measurement and disclosure of assets and liabilities ~~thereby~~arising ~~impacts~~from ~~the~~contingencies ~~cash~~in ~~provided~~a bybusiness ~~operations~~combination under SFAS 141(R). ~~Construction~~Under the ~~costs~~new ~~also~~guidance, ~~impact~~assets acquired and liabilities assumed in a business ~~cash~~combination ~~requirements~~that ~~throughout~~arise from contingencies should be recognized at fair value on the ~~year.~~acquisition ~~Cash~~date ~~needs~~if ~~for~~fair ~~operations~~value ~~and~~can be determined during the measurement ~~construction~~period. ~~are~~If ~~met~~fair ~~partially~~value ~~through~~cannot ~~short-term~~be ~~borrowings~~determined, ~~from~~companies ~~our~~should typically account ~~LOC~~for the acquired contingencies using existing guidance.

~~The Company purchased land for the initial construction of our South Florida division office on July 5, 2007 for a cost of $3~~13.4 million. The current South Florida division office is located on environmentally impacted property, which requires relocating the office to allow for clean up of the property. We are planning to complete this new facility in the next two years.

~~Other commitments~~Fair ~~for~~Value ~~capital expenditures for the remainder~~ of ~~2007~~Financial ~~consist of $775,000 for the purchase of a transformer and vehicle purchases totaling approximately $458,000.~~Instruments

~~Cash requirements~~In ~~are~~September ~~anticipated~~2006, tothe ~~increase~~FASB ~~significantly~~issued inSFAS No. 157, ~~the~~“Fair Value ~~future~~Measurements” ~~due~~(“SFAS 157”), towhich defines fair value, establishes a ~~additional~~framework ~~environmental~~for ~~clean~~measuring upfair ~~costs~~value in GAAP, ~~sinking~~and ~~fund~~expands ~~payments~~disclosures onabout ~~long-term~~fair ~~debt and~~value ~~pension contributions~~measurements. ~~Environmental~~SFAS 157 ~~clean~~does upnot ~~costs~~require ~~are~~any ~~forecasted~~new tofair bevalue ~~approximately $613~~measurements,~~000~~ ~~through~~but ~~2007,~~provides ~~with~~guidance ~~remaining~~on ~~payments~~how ~~totaling~~to measure fair value by providing a ~~approximately~~fair ~~$13.1~~value ~~million,~~hierarchy ~~beginning~~used into ~~2008~~classify ~~and~~the ~~ending~~source inof ~~2021~~the information. ~~Annual~~In February ~~long-term~~2008, ~~debt~~the ~~sinking~~FASB ~~fund~~deferred ~~payments~~the effective date of ~~approximately~~SFAS 157 ~~$1.4~~by ~~million~~one ~~will~~year ~~begin~~for ~~in 2008~~certain non-financial assets and ~~will~~non-financial ~~continue~~liabilities, ~~for~~except ~~eleven~~those ~~years.~~that are ~~Current~~recognized ~~projections~~or ~~indicate~~disclosed ~~that~~ at fair value in the ~~company~~ ~~will~~financial ~~make~~statements on a recurring ~~voluntary~~basis ~~contribution~~(at ofleast ~~$250~~annually). On January 1,~~000~~ to2008, ~~its~~we ~~pension~~adopted ~~plan~~the ~~in 2007.~~provisions Weof ~~may~~SFAS 157, ~~have~~except ~~significant~~as ~~pension~~it ~~contribution~~applies ~~requirements~~to ~~for~~those ~~several~~non-financial assets ~~years~~and ~~beginning~~non-financial ~~with~~liabilities ~~2008~~for ~~due~~which tothe ~~new~~effective ~~pension~~date ~~funding~~has ~~rules~~been delayed by one year. ~~Starting~~On January 1, ~~2005~~ 2009, we ~~froze~~adopted ~~our~~the ~~defined~~provisions ~~benefit~~of ~~plan~~SFAS to157 ~~new~~for non-financial ~~entrants~~assets and non-financial liabilities. The adoption of SFAS 157 did not have a material effect on our financial position or results of operations.

~~Due to delayed~~The ~~environmental~~carrying ~~clean-up~~amounts ~~costs,~~reported wein ~~currently~~the dobalance ~~not~~sheet ~~anticipate~~for ~~that any~~investments ~~equity~~held ~~or debt financing~~ in ~~2007~~escrow ~~will~~for beenvironmental ~~required. We believe that cash from operations~~costs, ~~coupled~~notes ~~with short-term borrowings on the LOC~~payable, ~~will~~taxes beaccrued ~~sufficient~~and other ~~to satisfy~~accrued ~~our~~liabilities ~~operating~~approximate ~~expenses,~~fair ~~normal~~value. The ~~capital~~fair ~~expenditure~~value ~~requirements~~of ~~and~~long-term ~~dividend~~debt ~~payments~~excluding ~~through~~the ~~spring~~unamortized ofdebt ~~2008. However,~~discount ~~cash~~is ~~requirements are~~estimated ~~forecasted~~by todiscounting ~~increase significantly in~~ the future ~~due~~cash toflows ~~our~~of ~~environmental clean~~each upissuance ~~costs,~~at arates ~~land~~currently ~~purchase,~~offered ~~and sinking fund payments on long-term debt and pension contributions. If cash needs relating~~ to the ~~land~~Company ~~purchase and related~~for ~~construction~~similar ~~and~~debt ~~the~~instruments ~~timing~~ of ~~environmental~~comparable ~~expenditures change, it is possible we may consider equity or debt financing~~maturities. The ~~need~~indentures ~~and~~governing ~~timing will~~our ~~depend~~two ~~upon~~first ~~the~~mortgage ~~overall~~bond ~~company~~series ~~cash~~outstanding ~~flow~~contain ~~requirements. There~~"make-whole" ~~can be~~provisions no(pre-payment ~~assurance,~~penalties ~~however,~~ that ~~equity~~charge orfor ~~debt~~lost ~~financing will be available on favorable terms, or at all, when we seek such financings~~interest).

~~Index~~The values at March 31, 2009 and December 31, 2008 are shown below.

Outlook


(Dollars in thousands)	March 31, 2009		December 31, 2008
	Carrying Amounts	Approximate Fair Value	Carrying Amounts	Approximate Fair Value
Long-term debt	$50,966	$56,700	$50,966	$ 56,600

~~Electric~~On January 1, 2008, we adopted the provisions of ~~Power~~SFAS No. 159 ~~Supply~~“The Fair Value Option for Financial Assets and Financial Liabilities — including an amendment of FASB Statement No. 115” (“SFAS 159”). SFAS 159 provides companies with an option to report selected financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings at each subsequent reporting date. The fair value option: (i) may be applied instrument by instrument, with a few exceptions, such as investments accounted for by the equity method; (ii) is irrevocable (unless a new election date occurs); and (iii) is applied only to entire instruments and not to portions of instruments. We did not elect to record any additional assets or liabilities at fair value.

~~Contracts with our two electric suppliers were originally set to expire on December 31, 2007~~14. Those long-term contracts provided electricity to our customers at rates much lower than current market rates. As part of our negotiations, we agreed to end the current contract terms for our Northeast division on December 31, 2006 and executed an amended contract that began January 1, 2007 and will expire December 31, 2017. Although the contract rates have increased for 2007, this enabled us to obtain lower rates for the new contract than would have been available if we had not revised the contract at December 31, 2006. The savings are passed through to our customers without profit to us.

WeSegment executed a contract for the provider of electricity in our Northwest division in December 2006 and the contract was approved by the FPSC in July 2007. This contract will be for the purchase of electricity beginning January 1, 2008.Information

~~We anticipate~~The ~~that~~Company ~~our~~is ~~new~~organized ~~supply~~into ~~contracts~~two ~~will~~regulated ~~result~~business insegments: natural ~~rates~~gas ~~close~~and ~~to market~~electric, ~~which~~ weand ~~believe~~one ~~may~~non-regulated ~~cause~~business ~~our~~segment, ~~customers’~~propane ~~bills~~gas. There toare ~~double~~no ~~during~~material ~~2008~~inter-segment ~~over current~~sales ~~prices~~or transfers.

~~We are unable~~Identifiable toassets ~~precisely~~are ~~estimate~~those ~~what~~assets ~~impact~~used in the ~~higher~~Company’s operations ~~rates~~in ~~could~~each ~~have~~business onsegment. Common ~~electric consumption~~assets ~~but~~are weprincipally docash and ~~feel~~overnight itinvestments, ~~could~~deferred betax asassets ~~much~~and ascommon ~~a 10% reduction~~plant.

~~Over-earnings-Natural~~Business segment information at March 31, 2009, and December 31, ~~Gas~~2008 ~~Segment~~is summarized as follows:

The FPSC approves rates that are intended to permit a specified rate of return on investment and limits the maximum amount of earnings of regulated operations. We recorded estimated 2006 and 2005 over-earnings for the natural gas segment of $25,000 and $735,000, respectively. We revised our estimate for the 2005 overearnings in the second quarter of 2007 an additional $85,000. These liabilities have been included in the over-earnings liability on our balance sheet. The calculations supporting these liabilities are complex and involve a variety of projections and estimates before the ultimate settlement of such obligations. Estimates may be revised as expectations change and factors become known and determinable.


(Dollars in thousands)		2009		2008
Identifiable assets
Natural gas	$	101,627	$	101,920
Electric		57,284		58,220
Propane gas		17,897		18,534
Common		23,588		30,257
Consolidated	$	200,396	$	208,931

~~Our 2005 and~~Business ~~2006~~segment ~~estimates~~information ~~of our over-earnings liabilities could change upon the FPSC finalization of our earnings~~ for ~~2007 and 2008. The FPSC determines~~ the ~~disposition~~ ofquarter ~~over-earnings~~ending ~~with~~March ~~alternatives that include refunds to~~31, ~~customers~~2009, ~~funding~~and ~~storm~~March ~~damage or environmental reserves~~31, or2008 ~~reducing~~is ~~any depreciation~~summarized ~~reserve~~as ~~deficiency.~~follows:

Index


(Dollars in thousands)		2009		2008
Revenues
Natural gas	$	19,711	$	22,137
Electric		22,033		17,523
Propane gas		4,037		5,370
Consolidated	$	45,781	$	45,030
Operating income, excluding income tax
Natural gas	$	1,699	$	2,392
Electric		14		735
Propane gas		292		884
Consolidated	$	2,005	$	4,011
Depreciation and amortization

The FPSC staff issued a recommendation on August 2, 2007, and if approved, the overearnings for 2005 will remain as currently estimated, and the disposition will be used to fund our storm reserve and eliminate the storm surcharge and the related regulatory asset – storm reserve in our natural gas operations.


Natural gas		$		1,253		$		1,188
Electric				816				787
Propane gas				210				201
Common				86				77
Consolidated		$		2,365		$		2,253
Income tax expense
Natural gas	$		294		$		579
Electric			(75)				142
Propane gas			88				276
Common			94				69
Consolidated	$		401		$		1,066
Construction expenditures
Natural gas	$		1,143		$		1,255
Electric			652				1,492
Propane gas			131				186
Common			55				36
Consolidated	$		1,981		$		2,969

~~Land~~15. ~~Purchase~~ Subsequent Events

WeOn April 17, 2009, we executed a definitive merger agreement with ~~purchased~~Chesapeake ~~land~~Utilities ~~for~~Corporation ~~$3.4~~(“Chesapeake”) ~~million~~pursuant into ~~July~~which ~~2007~~Florida ~~for~~Public Utilities Company (FPU) will merge with a ~~new~~wholly ~~South~~owned ~~Florida~~subsidiary ~~division~~of Chesapeake. ~~office~~ The merger agreement, publicly announced on April 20, 2009, was approved by the boards of directors of both FPU and Chesapeake and is subject to the approval of the shareholders of both companies. We Pursuant ~~are~~to inthe terms of the ~~process~~merger agreement, FPU shareholders will receive 0.405 shares of ~~preparing~~Chesapeake common ~~plans~~stock for aeach ~~building~~share onof ~~this~~FPU common stock held by them. The merger ~~property~~is intended to qualify as a tax-free reorganization and ~~expect~~ is subject to ~~begin~~ ~~construction~~various regulatory inapprovals. The ~~2008~~merger is expected to close during the fourth quarter of 2009 assuming all required approvals and other conditions to closing are satisfied.

~~Storm~~On May 5, 2009 the FPSC approved a final natural gas rate increase ~~Related~~of ~~Expenditures~~approximately $8.5 million in revenues annually with new rates beginning on June 4, 2009. Interested parties may protest the action of the Commission within 21 days after the entry of the Commission order and if the ruling is protested, a full hearing will be required within eight months. Revenues may be collected pending possible refund upon final determination at the full hearing. These revenues should provide an increase to the Company’s overall profitability for the natural gas segment and recovery of increased expenditures including depreciation and other expenses beginning in 2009.

~~Regulators continue~~Item ~~to focus on hurricane preparedness and storm recovery issues for utility companies~~2. ~~Newly~~Management’s ~~mandated~~Discussion ~~storm preparedness initiatives could impact our operating expenses~~ and ~~capital~~Analysis ~~expenditures later in 2007. The initial forecasts~~ of ~~these~~Financial ~~annual~~Condition ~~expenditures are approximately $700,000. It is possible that additional regulation~~ and rules will be mandated regarding storm related expenditures over the next several years. We requested that the FPSC allow us to recover the cost of the newly mandated storm preparedness initiatives and to defer these storm-related expenditures until we receive recovery through a rate increase. Several alternatives have been considered for recovery and implementation; however, in June 2007 the FPSC requested their staff to provide a new recommendation for implementation and recovery of these storm hardening measures at a later date. We expect the new recommendation by the FPSC staff later in 2007. If the new recommendation requires implementation beginning in the third or fourth quarter of 2007, it could have a significant effect on operating results. The recovery of these costs will be considered in our electric base rate proceeding expected to be filed in the third quarter of 2007.

~~Electric~~ Results ~~Base~~of ~~Rate~~Operations ~~Proceeding~~

We plan to file a request with the FPSC in the third quarter of 2007 for a base rate increase in our electric segment. This request will include recovery of increased expenses and capital expenditures since our last rate proceeding in 2004, as well as additional storm-related expenditures as discussed above. Finalization of this request and approval, if any, of an electric base rate increase would not occur until early 2008. Possible interim rate relief for partial recovery of the increased expenditures may occur in late 2007.Overview

~~Forward-Looking~~We have three primary business segments: natural gas, electric and ~~Statements~~propane ~~(Cautionary~~gas. ~~Statement~~The Florida Public Service Commission (FPSC) regulates the natural gas and electric segments. The effects of seasonal weather conditions, timing of rate increases, economic conditions, fluctuations in demand due to the cost of fuel passed on to customers, and the migration of winter residents and tourists to Florida during the winter season have a significant impact on income.

~~This~~Revenues and gross profit increased in the first quarter of 2009 ~~report~~compared ~~contains~~to ~~forward-looking~~the ~~statements~~same ~~including~~period ~~those~~in ~~relating~~the prior year due in a large part to the base ~~following:~~rate increases in our electric operations.

·Earnings ~~Based~~for onthe ~~our~~first ~~current~~quarter ~~expectations~~of ~~for~~2009 ~~cash~~were ~~needs,~~significantly ~~including~~impacted by ~~cash~~the ~~needs~~pension ~~relating~~plan tofreeze. The ~~the~~pension ~~land~~curtailment ~~purchase~~expensed in ~~July~~the ~~2007~~first quarter ~~and~~of 2009 as a result of the ~~related~~freeze ~~construction,~~was weapproximately ~~may~~$2.3 ~~choose~~million. The impact to ~~consider~~net anincome ~~equity~~for the effects of these curtailment expenses is approximately $1.4 million after income taxes or ~~debt~~$.24 ~~financing~~per share for the quarter ending March 31, 2009.

·Earnings ~~Our~~continue ~~anticipation~~to ofbe ~~continued~~impacted ~~compliance~~by in the ~~foreseeable~~overall ~~future~~economic slow-down and management expects current conditions to continue through 2009 with an ongoing impact to our ~~LOC~~customer ~~covenants~~growth rates, unit sales and sales expense. Management continues to look for ways to help offset the negative impacts of the current economic condition.

~~Index~~Early in the second quarter, we entered into a merger agreement with Chesapeake Utilities Corporation. See Note 15, “Subsequent Events,” above and “Outlook,” below for more information about this proposed merger.

·Results of ~~Our expectation that cash requirements will increase significantly in the future due to environmental clean-up costs, sinking fund payment on long-term debt and pension contributions.~~Operations

~~· Our belief that cash from operations, coupled with short-term borrowings on our LOC, will be sufficient to satisfy our operating expenses, normal construction expenditure~~ Revenues and ~~dividend~~Gross ~~payments~~Profit ~~through spring of 2008.~~Summary

·Cost ~~Our~~recovery ~~2006~~revenues ~~and~~are ~~2005~~included ~~over~~in revenues. The FPSC allows cost recovery revenues to directly recover costs of fuel, conservation and revenue-~~earnings~~based ~~liability~~taxes in our natural gas ~~will~~and ~~materialize~~electric segments. Revenues collected for these costs and expenses have no effect on results of operations and fluctuations could distort the relationship of revenues between periods. Gross profit is defined as ~~estimated~~gross operating revenues less fuel, conservation and revenue-based taxes that are passed directly through to customers. Because gross profit eliminates these cost recovery revenues, we believe it provides a more meaningful basis for evaluating utility revenues. We believe data regarding units sold and number of customers provides additional information helpful in comparing periods. The following summary compares gross profit between periods and units sold in one thousand Dekatherm (MDth) (gas) and Megawatt Hour (MWH) (electric).

· We expect higher fuel costs beginning in 2008 for our Northwest electric division. We are unable to precisely estimate what impact the higher rates could have on electric consumption but we do feel it could be as much as a 10% reduction.


Revenues and Gross Profit
(Dollars in thousands)
	Three Months Ended
	March 31,
	2009	2008
Natural Gas
Revenues	$19,711	$22,137
Cost of fuel and other pass through costs	11,063	14,082

· Storm related expenditures may be necessary beginning in 2007 and the total cost may be significant. It may have a significant effect on operating results.


Gross Profit	$ 8,648	$ 8,055
Units sold: (MDth)	1,964	1,861
Customers (average for the period)	52,095	52,166
Electric
Revenues	$22,033	$17,523
Cost of fuel and other pass through costs	17,715	13,859
Gross Profit	$ 4,318	$ 3,664
Units sold: (MWH)	165,245	173,276
Customers(average for the period)	31,109	31,221
Propane Gas
Revenues	$4,037	$5,370
Cost of fuel	1,884	2,971
Gross Profit	$2,153	$2,399
Units sold: (MDth)	166	170
Customers (average for the period)	12,374	12,666
Consolidated
Revenues	$45,781	$45,030
Cost of fuel	30,662	30,912
Gross Profit	$15,119	$14,118
Customers(average for the period)	95,578	96,053

·Three Months WeEnded ~~expect~~March ~~to file for an electric base rate increase in the third quarter of 2007 and finalization is expected in early 2008. Final rates~~31, if2009 ~~approved~~Compared bywith ~~the~~Three ~~FPSC,~~Months ~~would~~Ended ~~not~~March ~~occur until~~ 31, 2008.

~~These~~Revenues ~~statements involve certain risks~~ and ~~uncertainties.~~Gross Actual results may differ materially from what is expressed in such forward-looking statements. Important factors that could cause actual results to differ materially from those expressed by the forward-looking statements include, but are not limited to, those set forth in “Risk Factors” in our Form 10-K for the year ended December 31, 2006.Profit

~~Item~~Natural ~~3. Quantitative and Qualitative Disclosures about Market Risk~~Gas

~~All financial~~Natural ~~instruments~~gas ~~held~~service byrevenues usdecreased ~~were~~$2.4 ~~entered~~million ~~into~~in ~~for~~the ~~purposes other than~~first ~~for trading. We~~quarter ~~have~~of ~~market~~2009 ~~risk exposure only~~ from the ~~potential~~same ~~loss~~period in ~~fair~~ ~~value~~2008 ~~resulting~~due ~~from~~to ~~changes~~lower infuel ~~interest~~and ~~rates.~~other Wecosts passed ~~have~~through noto ~~material exposure~~customers ~~relating~~of to$3 ~~commodity~~million. ~~prices~~Colder ~~because~~temperatures ~~under~~in ~~our~~the ~~regulatory~~first ~~jurisdictions,~~quarter weof ~~are~~2009 ~~fully~~compared ~~compensated~~to ~~for~~ the ~~actual~~same ~~costs~~period oflast ~~commodities (natural~~year ~~gas~~was ~~and~~the ~~electricity)~~primary ~~used~~reason infor a ~~our operations~~5.5% ~~Any~~increase ~~commodity~~in ~~price increases~~units ~~for~~sold ~~propane~~and ~~gas~~a ~~are~~7% ~~normally~~increase ~~passed~~in ~~through~~gross ~~monthly~~profit. Interim rates toawarded ~~propane~~in our natural gas ~~customers~~ asrate ~~the~~proceeding ~~fuel~~beginning ~~charge~~March ~~portion~~2009 ofalso positively ~~their~~impacted ~~rate~~our gross profit.

~~On a rolling~~Electric ~~four-quarter~~service ~~basis,~~revenues weincreased ~~will~~$4.5 ~~purchase~~million ain ~~“cap”~~the ~~on approximately one-third~~first ofquarter ~~our forecast propane volume purchases and pre-buy or hedge with a swap one-third~~ of ~~our~~2009 ~~forecast~~over ~~anticipated~~the ~~propane~~same ~~purchases.~~period ~~The~~in ~~remaining one-third will fluctuate with the market price~~2008. ~~Our~~Higher ~~energy~~cost ~~strategy allows us to participate in two-thirds~~ of ~~price~~fuel ~~declines~~and ~~but only one-third of price~~other ~~increases. As~~costs ofthat ~~June~~were ~~30,~~passed ~~2007,~~through weto ~~have~~customers ~~not~~accounted ~~entered~~for ~~into any hedging activities~~$3.9 ~~When~~million ~~we do enter into hedging activities, we will determine whether they meet the definition~~ of ~~normal sales and purchases and if not, we will~~this ~~determine whether we can use hedge accounting~~increase.

~~Index~~Gross profit increased by $654,000 or 18% this quarter compared to the first quarter of 2008 primarily due to the final base rate increase approved April 2008, compared to interim rates which were in effect in the first quarter of 2008. Units sold, excluding industrial customers, decreased by 4.8%. Management believes this decrease is a result of possible conservation measures taken by our customers due to fuel and base rate increases. Gross profit was not materially impacted by reduced consumption as this was forecasted in our electric rate increase approved April 2008. Rates were set to compensate for the anticipated reduction in units sold due to significant increases in fuel costs.

WePropane have no exposure to equity risk, as we do not hold any equity instruments. Our exposure to interest rate risk is limited to investments held for environmental costs, the long-term notes receivable from the sale of our water division and short-term borrowings on the line of credit. The investments held for environmental costs are short-term fixed income debt securities whose carrying amounts are not materially different than fair value. The short-term borrowings were approximately $1.1 million at the end of June 2007. We do not believe we have material market risk exposure related to these instruments. The indentures governing our two first mortgage bond series outstanding contain "make-whole" provisions (pre-payment penalties that charge for lost interest), which render refinancing impracticable.Gas

~~Item~~Propane revenues decreased $1.3 million in the first quarter of 4T2009 compared to the same period in 2008. The cost of fuel contributed to ~~Controls and~~$1.1 ~~Procedures~~million of the revenue decrease, with gross profit decreasing by $246,000.

~~Disclosure~~In spite of colder temperatures units sold declined by 2.4%. ~~Controls~~ Management believes this is a result of the downturn in the housing market and ~~Procedures~~the economy as a whole which had a negative impact on customer usage.

~~Our~~Operating ~~management~~Expenses carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer as of June 30, 2007, concluded that our disclosure controls and procedures were effective, in that they provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

~~Changes~~Operating expenses increased $3.0 million in ~~Internal~~the ~~Control~~first quarter of 2009 as compared to the same period in 2008. The recent pension plan freeze significantly impacted our operating expenses in the first quarter of 2009; related curtailment costs associated with our pension plan freeze increased operating expenses by approximately $2.2 million. In addition to the pension curtailment costs, administrative and general expenses increased $178,000 primarily due to increased pension expenses unrelated to the plan freeze and auditing fees related to our initial required audit of internal control over ~~Financial~~financial ~~Reporting~~reporting under Sarbanes Oxley section 404. As we continue to experience the impact of the declining economy, bad debt expenses increased $220,000 due in a large part to a recent bankruptcy of a commercial customer in our electric segment. Maintenance expenses increased $129,000 as a result of several severe storms and storm hardening initiatives recently mandated by the FPSC.

NoOther ~~change in~~Income ~~our internal control over financial reporting (as defined in Rules 13a-15(f)~~ and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended June 30, 2007 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.Deductions

~~PART~~Merchandise and service revenue increased by $39,000 and expense IIincreased by $25,000 in the first quarter of 2009 compared to the same period last year resulting in increased profitability of $14,000. ~~OTHER~~ ~~INFORMATION~~Although we continue to experience effects of the slowing economy, sales increased through a successful coupon program.

~~Item 4. Submission~~Other ofincome ~~Matters~~increased to$44,000 primarily for interest income on a deposit ~~Vote~~refund from one of ~~Security Holders~~our fuel providers.

~~The Company~~Total ~~held~~interest ~~its~~expense ~~annual~~decreased ~~meeting~~by $77,000 in the first quarter of ~~stockholders~~2009 compared to the same period last year. This was due primarily to a lower average balance on ~~May~~our 8,line ~~2007~~of credit as a result of increased cash flow from operations and lower capital expenditures. At In addition, the interest rate on our ~~that~~line ~~meeting~~of credit, tied to the ~~stockholders~~London ~~were~~Interbank ~~asked~~Rate (LIBOR), was lower this quarter, compared to ~~consider~~the ~~and~~first ~~act~~quarter onof 2008. Our line of credit was also amended in March 2008, lowering the interest rate margin paid on borrowings ~~following:~~by 0.10% or 10 basis points.

·Liquidity and ~~Election~~Capital ~~of two 2 directors~~Resources

~~· Ratification of the appointment of BDO Seidman, LLP, as the Company’s independent audit firm~~Cash Flows

~~The~~Operating ~~following people were elected as directors for terms expiring in 2010 and received the number of votes set forth opposite his respective name:~~Activities

Nominee	For	Against/Withheld	Broker Non-votes	Abstentions
Richard C. Hitchins	5,093,437	377,184	0	0
Troy W. Maschmeyer, Jr.	5,094,951	375,670	0	0

Net cash flow provided by operating activities for the three months ended March 31, 2009 increased by approximately $8.2 million over the same period in 2008. Over-recovered fuel costs accounted for approximately $3.8 million of the increase in the current year’s net cash flow. Colder temperatures along with our electric and natural gas base rate increases also contributed approximately $2.8 million of the increase.

~~Index~~Investing Activities

~~The~~Construction expenditures in the three months ended March 31, 2009 ~~following~~decreased ~~votes~~by ~~were~~$1.0 ~~cast~~million compared with the same period last year. The decrease was primarily due to ~~ratify~~discretionary ~~appointment~~capital ofexpenditures ~~the~~controls ~~Company’s~~instituted ~~independent~~by ~~audit~~the ~~firm,~~company ~~BDO~~during ~~Seidman,~~the ~~LLP:~~current slow-down in the economy.

For	Against/Withheld	Broker Non-votes	Abstentions
5,437,911	16,248	0	16,461

Financing Activities

~~Item~~Short-term 6borrowing on our line of credit decreased by $8.3 million ~~Exhibits~~in the first quarter of 2009 compared to the same period in 2008 primarily as a result of the reduced need for short-term borrowing primarily because of the increase in funds provided from our operations and lower capital expenditures.

~~3.1 Amended Articles of Incorporation (incorporated herein by reference as Exhibit 3.1 to our quarterly report on Form 10-Q for the period ended June 30, 2002).~~Capital Resources

3We have a revolving line of credit with Bank of America which expires July 1, 2010.2 ~~Amended~~Prior ~~By-Laws~~to ~~(incorporated~~March ~~herein~~2008, bythe ~~reference~~available asline ~~Exhibit~~of ~~3(ii)~~credit was $15 million with the ability to increase the limit to a maximum of $20 million upon 30 days notice. In March 2008, we amended our ~~quarterly~~line ~~report~~of credit to allow us, upon 30 days notice, to increase our maximum credit line from $20 million to $26 million and to reduce the interest rate paid on ~~Form~~borrowings by 0.10-Q% ~~for~~or 10 basis points. In April 2008, we increased the ~~period~~currently ~~ended~~available ~~June~~line 30of credit from $12 million to $15 million. The balance outstanding was $3 million at March 31, 2009. ~~2002)~~We reserve $1 million of the line of credit to cover potential expenses for any major storm repairs in our electric segment and an additional $250,000 for a letter of credit insuring propane gas facilities.

~~4.1~~The ~~Indenture~~line of ~~Mortgage~~credit contains affirmative and ~~Deed~~negative ofcovenants that, ~~Trust~~if violated, would give the bank the right to accelerate the due date of the ~~FPU~~loan ~~dated~~to asbe immediately payable. The line of ~~September~~credit 1,covenants ~~1942~~with ~~(incorporated~~Bank byof America ~~reference~~include ~~herein~~certain tofinancial ~~Exhibit~~ratios, ~~7-A~~all toof ~~Registration~~which ~~No.~~are ~~2-6087)~~currently met.

~~4.2~~The ~~Fourteenth~~line ~~Supplemental~~of ~~Indenture dated September 1~~credit, ~~2001~~long-term ~~(incorporated~~debt byand ~~reference~~preferred tostock ~~exhibit~~as ~~4.2~~of onMarch 31, ~~our~~2009 ~~annual~~comprised ~~report~~52% onof ~~Form~~total ~~10-K~~debt ~~for~~and ~~the~~equity ~~year ended December 31, 2001)~~capitalization.

~~4.3~~Historically ~~Fifteenth~~we ~~Supplemental~~have ~~Indenture~~periodically ~~dated~~paid ~~November~~off 1,short-term ~~2001~~borrowings under ~~(incorporated~~lines byof ~~reference~~credit using the net proceeds from the sale of long-term debt or equity securities. We continue to ~~exhibit~~review 4our financing options.3 Any choice of financing will be predicated on the current needs and dependent on prevailing market conditions, the impact to our ~~annual~~financial ~~report~~covenants and the effect on income. ~~Form~~The ~~10-K~~timing ~~for~~of additional funding will be dependent on projected environmental expenditures, building of the ~~year~~South ~~ended~~Florida ~~December~~operations 31facility, pension ~~2001)~~contributions, and other capital expenditures.

~~31.1~~Our ~~Certification~~1942 Indenture of ~~Chief~~Mortgage ~~Executive~~and ~~Officer~~Deed ~~(CEO)~~of ~~per~~Trust, ~~Section~~which ~~302~~is a mortgage on all real and personal property, permits the issuance of additional bonds based upon a calculation of unencumbered net real and personal property. At March 31, 2009, such calculation would permit the ~~Sarbanes-Oxley~~issuance ~~Act~~of approximately $49.6 million of ~~2002~~additional bonds.

~~31.2~~On ~~Certification~~October of14, ~~Chief~~2008 ~~Financial~~we ~~Officer~~received ~~(CFO)~~approval ~~per~~from ~~Section~~the ~~302~~FPSC to issue and sell or exchange an additional amount of ~~the~~$45 million in ~~Sarbanes~~any combination of long-~~Oxley~~term ~~Act~~debt, ofshort-term ~~2002~~notes and equity securities and/or to assume liabilities or obligations as guarantor, endorser or surety during calendar year 2009.

32We ~~Certification~~have of$3.5 ~~Principal~~million ~~Executive~~in ~~Officer~~invested ~~and~~funds ~~Principal~~for ~~Financial~~payment ~~Officer~~of ~~per~~future environmental ~~Section~~costs. ~~906~~We ofexpect ~~the~~to ~~Sarbanes-Oxley~~use ~~Act~~some or all of ~~2002~~these funds in 2010 and 2011.

~~10.~~We expect to receive tax refunds of approximately $1.8 ~~Agreement~~million in early 2009. The primary reason for ~~the~~this ~~purchase~~refund is our planned pension contribution of ~~land~~$4.6 million for plan year 2008 expected to be made in ~~south~~2009. This ~~Florida,~~pension ~~dated~~contribution ~~July~~is 5,a ~~2007~~deduction for tax purposes in 2008 calendar year but was not known at the time of estimated tax payments made in calendar year 2008.

~~Index~~As of March 31, 2009 there was approximately $5.7 million in receivables from the 2003 sale of our water assets. Final payment of principal and interest totaling $5.7 million is expected in February 2010.

~~SIGNATURES~~Capital Requirements

~~Pursuant~~Portions of our business are seasonal and dependent upon weather toconditions ~~the~~in ~~requirements~~Florida. ofThis ~~the~~factor ~~Securities~~affects ~~Exchange~~the ~~Act~~sale of ~~1934,~~electricity ~~the~~and ~~registrant~~gas and ~~has duly~~impacts ~~caused~~the ~~this~~cash ~~report~~provided toby beoperations. ~~signed~~Construction oncosts ~~its~~also ~~behalf~~impact bycash requirements throughout the ~~undersigned~~year. Cash ~~thereunto~~needs for operations and ~~duly~~construction ~~authorized~~are met partially through short-term borrowings from our line of credit.

~~FLORIDA~~Capital expenditures are expected to be lower for the remainder of ~~PUBLIC~~2009 ~~UTILITIES~~compared ~~COMPANY~~to 2008 by approximately $900,000 due primarily to the Company’s current controls on discretionary capital expenditures during the current economic slow-down.

~~(Registrant)~~We currently do not have any outstanding commitments for capital expenditures.

Date: August 13, 2007	By: /s/ George M. Bachman
	George M. Bachman
	Chief Financial Officer
	(Principal Accounting Officer)

Cash requirements will increase significantly in the future due to environmental cleanup costs, sinking fund payments on long-term debt and pension contributions. Environmental cleanup is forecast to require payments of $774,000 in 2009, with remaining forecasted payments, which could total approximately $9.1 million net of investment proceeds, beginning in 2010. Annual long-term debt sinking fund payments of approximately $1.4 million will continue in 2009 for ten years.

~~Index~~Based on current projections, we will make required contributions to our defined benefit pension plan of approximately $560,000 and $1.2 million in 2009 for the 2008 and 2009 plan years respectively. In addition, we expect to make a voluntary contribution of $4 million for the 2008 plan year. We will continue in future years to make contributions as required by the Pension Protection Act funding rules.

~~FLORIDA~~We believe that cash from operations, coupled with short-term ~~PUBLIC~~borrowings ~~UTILITIES~~on ~~COMPANY~~our line of credit, will be sufficient to satisfy our operating expenses, normal construction expenditure and dividend payments through 2009. However, if we experience significant environmental expenditures in the next two or three years it is possible we may need to raise additional funds. There can be no assurance, however, that equity or debt transaction financing will be available on favorable terms or at all when we make the decision to proceed with a financing transaction.

~~EXHIBIT INDEX~~Outlook

~~Item Number~~Pension Plan

In March 2009, the Company's Board of Directors authorized amendments to the pension plan in an effort to reduce anticipated future pension expenses. As a result of these amendments, the Company will freeze the pension plan for all participants effective December 31, 2009.1 ~~Certification~~All future benefit accruals under the plan shall cease, including freezing salary rates at levels existing in 2009 average compensation as of ~~Chief~~December ~~Executive~~31, ~~Officer~~2009. ~~(CEO)~~In ~~per~~addition ~~Section~~to the ~~302~~freeze, the reduced early retirement eligibility will be lowered from 30 years to 20 years and two additional service years can be earned by active participants at the December 31, 2009 average compensation levels for the purposes of benefit accrual, vesting and retirement eligibility. Beyond December 31, 2011, active participants will continue to accrue service years for the purposes ~~Sarbanes-Oxley~~of ~~Act~~vesting and retirement eligibility. The two additional service years will increase annual pension cost by $800,000 in each of ~~2002~~the next two years.

31The amendments to the plan have been accounted for in accordance with SFAS No.2 ~~Certification~~88, Employers' Accounting for Settlements and Curtailments of Defined ~~Chief~~Benefit ~~Financial~~Pension ~~Officer~~Plans ~~(CFO)~~and ~~per~~for ~~Section~~Termination ~~302~~Benefits. ofThe ~~the~~pension liability ~~Sarbanes~~has been reduced by $5.7 million and we recognized approximately $2.7 million non-~~Oxley~~cash ~~Act~~pretax curtailment loss of ~~2002~~which $2.3 million is reflected in expenses and $400,000 is reflected on the balance sheet in the Company's consolidated statements.

32The ~~Certification~~freeze will reduce pension expenses beginning in the second quarter of ~~Principal~~2009. ~~Executive~~With ~~Officer~~the freeze, pension expense and pension ~~Principal~~contribution ~~Financial~~are ~~Officer~~expected ~~per~~to ~~Section~~be ~~906~~approximately of$500,000 and $13 million, respectively spread over the ~~Sarbanes-Oxley~~period ~~Act~~2009 ofthrough ~~2002~~2013.

~~10.1~~Natural ~~Agreement~~Gas ~~for~~Base ~~the~~Rate ~~purchase of land in south Florida, dated July 5, 2007.~~Proceeding

We filed a request with the FPSC in the fourth quarter of 2008 for a base rate increase of approximately $9.9 million annually in our natural gas segment. This request included recovery of increased expenses and some capital expenditures since our last rate proceeding in 2004.

On May 5, 2009 the FPSC approved a final natural gas rate increase of approximately $8.5 million in revenues annually with new rates beginning June 4, 2009. Interested parties may protest the action of the Commission within 21 days after the entry of the Commission order and if the ruling is protested, a full hearing will be required within eight months. Revenues may be collected pending possible refund upon final determination at the full hearing. These revenues should provide an increase to the Company’s overall profitability for the natural gas segment and recovery of increased expenditures including depreciation and other expenses beginning in 2009.

Interim rate relief was approved by the FPSC on February 10, 2009 for partial recovery of the increased expenditures. Interim rates which should produce additional annual revenues of approximately $1.0 million became effective on March 12, 2009 and will remain effective until final rates are in place on June 4, 2009.

Electric Franchise Marianna

The City of Marianna employed a Consultant to review the existing franchise agreement with the Company that is up for renewal in 2010 and to review the feasibility of purchasing the portion of our electric system that is within the city limits. On May 7, 2009 the City of Marianna Commissioners voted to enter into a new ten year franchise agreement with FPUC with stipulations that new Interruptible and Time of Use rates become available for certain customers prior to February 2011 or the franchise could be voided six months after that date. The second reading and final passage of the franchise ordinance is scheduled for June 2009 and the new agreement will be effective February 1, 2010. Should final approval of the ordinance not be obtained as anticipated, the City could elect to purchase the Marianna portion of the distribution system. This would require the city to pay severance/reintegration costs, fair market value for the system and the initial investment in the infrastructure to operate this limited facility. If the franchise is not renewed and the City purchases this portion of our electric system, the Company would have a gain in the year of the acquisition; but, ongoing financial results would be negatively impacted from the loss of this operating area within our electric operations.

Storm Preparedness Expenses

Regulators continue to focus on hurricane preparedness and storm recovery issues for utility companies. Mandated storm preparedness initiatives impacted our 2008 earnings and continue to impact our operating expenses and capital expenditures in 2009. The current forecast is not expected to exceed additional annual expenditures of approximately $260,000. During the 2008 rate proceeding, these storm preparedness costs were approved and have been included in the base rates. It is possible that additional regulation and rules will be mandated regarding storm related expenditures over the next several years.

Land Purchase

We purchased land for $3.5 million in July 2007 for a new South Florida operations facility. We started preparing plans for site development of this property but have temporarily placed this project on hold. We may begin construction in the next one to three years or sell the property if we determine we can return to the existing operations location.

Natural Gas Depreciation Study

We filed a depreciation study with the FPSC in the fourth quarter of 2008 for our natural gas segment. In April 2009, the FPSC approved new deprecation rates to be effective July 1, 2009. As a result of new depreciation rates, depreciation expense is expected to increase approximately $200,000 annually beginning July 1, 2009, and we received full recovery for this increased expense in our base rate increase.

Large Customer in NE Electric Division

A large industrial customer in our northeast electric division filed for bankruptcy on January 26, 2009.

Although the average monthly gross profit from this customer was approximately $29,000 in 2008, the average total monthly bill including fuel costs for this customer was approximately $250,000. This customer has currently paid all outstanding amounts that were due as of December 31, 2008. The Company has reserved approximately $200,000 for this potential bad debt in the first quarter of 2009 awaiting the outcome of this bankruptcy proceeding. If the courts determine that we have to refund any prior payments, the Company may be required to write-off a portion of this customer’s receivables including fuel cost to our reserve.

Bad Debt Expense

Management expects bad debt expense and related write-offs of receivables to continue increasing further in 2009 as a result of the current economic climate and the impact to our customers. We are not able to predict the impact to our financial results, but we do anticipate an increase to bad debt expense over 2008 levels.

Energy Efficiency Legislation

Regulators are focusing on several legislative issues involving the Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007 and related issues. One major provision is the implementation of a renewable portfolio standard. Since the Company is a non-generating utility with existing ten year all-requirements wholesale energy contracts, there is significant concern over the additional purchased power cost that may be required to comply with the standard. Although this cost may be passed on to the customers through a rate increase, continued decrease in customer usage will have an impact on operations. “Smart Grid Technology” is another item being considered that would require significant capital investment to develop, install and manage. The Company understands the overall benefits from the legislation but the burden imposed on a small utility like ours is of particular concern. The Company is continuing to communicate with the FPSC to find solutions that will work for the Company, while maintaining manageable electric rates for customers.

Covenants

We have historically met all our line of credit and fuel supplier covenants. As of December 2008 we were in violation of a covenant regarding our total liabilities to tangible net worth ratio included in one of our supply agreements with a fuel provider. The violation was caused primarily by a significant increase in our pension liability. Failure to meet this covenant would have required us to provide a one year irrevocable letter of credit for $3.3 million; however, we received a 30 day time extension to March 27, 2009 to meet this covenant ratio. On March 20, 2009, we calculated the covenant ratio, as of February 28, 2009 as required, and the supplier was advised that we were once again in compliance with this covenant. At this time management does not anticipate any further covenant violations.

Our line of credit contains a similar covenant ratio. Management is continuing to take steps to comply with all covenants on an ongoing basis, but there can be no assurance that further deterioration of the market or the economy will not occur and give rise to a violation.

The Company is in compliance with all covenants on our line of credit and other fuel supply agreements at March 31, 2009.

Merger

We entered into a definitive merger agreement with Chesapeake Utilities Corporation (“Chesapeake”) on April 17, 2009. The merger was approved by both companies' boards of directors and is subject to the approval of both companies’ shareholders. Under the merger agreement, holders of Florida Public Utilities common stock will receive 0.405 shares of Chesapeake common stock in exchange for each outstanding share of Florida Public Utilities. The merger is intended to qualify as a tax-free reorganization and is subject to various regulatory approvals and closing conditions as set forth in the merger agreement. The merger is expected to close during the fourth quarter of 2009 assuming all approvals are obtained and closing conditions are satisfied.

Forward-Looking Statements (Cautionary Statement)

This report contains forward-looking statements including those relating to the following:

Our consideration of equity or debt financing in the next few years.

Cash requirements will increase significantly in the future due to environmental clean-up costs, sinking fund payments on long-term debt and pension contributions.

Cash from operations, coupled with short-term borrowings on our line of credit, will be sufficient to satisfy our operating expenses, normal construction expenditure and dividend payments through 2009.

Realization of actual additional revenues from the electric rate proceeding finalized in May 2008 will occur as expected.

Realization of actual additional revenues from the natural gas rate proceeding finalized in May 2009 will occur as expected.

Impact of the overall economic conditions on our earnings, customer growth rates, unit sales and sales expense.

Capital expenditures will be less than originally expected for 2009.

Timing and progress of construction on the South Florida operations facility.

Increase in pension contributions to our defined benefit pension plan in 2009 and beyond.

Amortization of pension service costs and pension expense as expected in future years.

Increase in bad debt expense on our customer accounts receivable.

Impact of Energy Efficiency Legislation on our Company and our operating results.

Renewal of the Marianna Franchise.

Additional annual expenditures relating to storm preparedness.

These statements involve certain risks and uncertainties. Actual results may differ materially from what is expressed in such forward-looking statements. Important factors that could cause actual results to differ materially from those expressed by the forward-looking statements include, but are not limited to, those set forth in “Risk Factors” in our Form 10-K for the year ended December 31, 2008.

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

All financial instruments held by us were entered into for purposes other than for trading. We have market risk exposure only from the potential loss in fair value resulting from changes in interest rates. We have no material exposure relating to commodity prices because under our regulatory jurisdictions, we are fully compensated for the actual costs of commodities (natural gas and electricity) used in our operations. Any commodity price increases for propane gas are normally passed through monthly to propane gas customers as the fuel charge portion of their rate.

None of our gas or electric contracts are accounted for using the fair value method of accounting. While some of our contracts meet the definition of a derivative, we have designated these contracts as "normal purchases" under SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities". As of March 31, 2009, we had not entered into any hedging activities, and we do not anticipate entering into hedging activities in 2009. Beginning in 2009, we started pre-buying propane when certain price levels are reached.

We have no exposure to equity risk, as we do not hold any material equity instruments. Our exposure to interest rate risk is limited to investments held for environmental costs, the long-term notes receivable from the sale of our water division and short-term borrowings on the line of credit. The investments held for environmental costs are short-term fixed income debt securities whose carrying amounts are not materially different than fair value. The short-term borrowings were approximately $3 million at the end of March 2009. We do not believe we have material market risk exposure related to these instruments. The indentures governing our two first mortgage bond series outstanding contain "make-whole" provisions (pre-payment penalties that charge for lost interest), which render refinancing impracticable until sometime after 2012.

Item 4T.

Controls and Procedures

Disclosure Controls and Procedures

In accordance with Exchange Act Rules 13a-15 and 15d-15, we carried out an evaluation, under the supervision and with the participation of management, including our CEO and CFO, of the effectiveness of our disclosure controls and procedures as of March 31, 2009. Based on evaluation, our CEO and CFO have concluded that, as of March 31, 2009, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting during the fiscal quarter ended March 31, 2009 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II.

OTHER INFORMATION

Item 1A.

Risk Factors

The risk factors should be read in conjunction with those included in our most recent Form 10-K for the year ending December 31, 2008.

Item 6.

Exhibits

2.1

Agreement and Plan of Merger between Florida Public Utilities Company and Chesapeake Utilities Corporation, a Delaware corporation, and its wholly owned subsidiary, CPK Pelican, Inc., a Florida corporation. (incorporated by reference to Exhibit 2.1 to our Form 8-K filed on April 17, 2009).

3.1

Restated Articles of Incorporation (incorporated herein by reference as Exhibit 3.2 on Form 8-K filed November 10, 2008).

3.2

Restated By-Laws (incorporated herein by reference as 3.1 on Form 8-K filed November 10, 2008).

4.1

Indenture of Mortgage and Deed of Trust of FPU dated as of September 1, 1942 (incorporated by reference herein to Exhibit 7-A to Registration No. 2-6087).

4.2

Fourteenth Supplemental Indenture dated September 1, 2001 (incorporated by reference to exhibit 4.2 on our annual report on Form 10-K for the year ended December 31, 2001).

4.3

Fifteenth Supplemental Indenture dated November 1, 2001 (incorporated by reference to exhibit 4.3 on our annual report on Form 10-K for the year ended December 31, 2001).

31.1

Certification of Chief Executive Officer (CEO) per Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of Chief Financial Officer (CFO) per Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Principal Executive Officer and Principal Financial Officer per Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

FLORIDA PUBLIC UTILITIES COMPANY

(Registrant)

Date: May 15, 2009

By: /s/ George M. Bachman

George M. Bachman

Chief Financial Officer

(Principal Accounting Officer)

FLORIDA PUBLIC UTILITIES COMPANY

EXHIBIT INDEX

Item Number

31.1

Certification of Chief Executive Officer (CEO) per Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of Chief Financial Officer (CFO) per Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Principal Executive Officer and Principal Financial Officer per Section 906 of the Sarbanes-Oxley Act of 2002.

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