Item 8.01 Other Events.

On December 30, 2010, Eastern Shore Natural Gas Company ("Eastern Shore"), a wholly owned subsidiary of Chesapeake Utilities Corporation, filed with the Federal Energy Regulatory Commission ("FERC") a base rate proceeding in compliance with the terms of its prior rate case settlement as approved in January 2008. The rate filing reflected increases in operating and maintenance expenses, depreciation expense, and a return on existing and new gas plant facilities expected to be placed into service before June 30, 2011. Following a discovery process, an on-site FERC Audit and the settlement conference process, Eastern Shore, FERC Staff and other interested parties reached a settlement in principle which was filed with the FERC on November 7, 2011. On January 24, 2012, FERC approved the proposed settlement.

The settlement provides a cost of service of approximately $29.1 million, a pre-tax return of 13.9 percent and the elimination of any sharing of interruptible revenues. This represents an annual rate increase of approximately $805,000, effective July 29, 2011. Included as part of the settlement is a rate reduction, effective November 1, 2011, associated with the 15,000 Dekatherms per day ("Dts/d") phase-in of new transportation services on Eastern Shore's eight-mile extension to interconnect with the Texas Eastern Transmission LP ("TETLP") pipeline system. This rate reduction fully offsets the increased revenue that would have been generated from the 15,000 Dts/d increase in firm service. The settlement also provides a five-year moratorium on challenging Eastern Shore's rates and on Eastern Shore's right to file a base rate increase. The settlement allows Eastern Shore to file for rate adjustments during those five years in the event certain costs related to government-mandated obligations are incurred and Eastern Shore's pre-tax earnings do not equal or exceed 13.9 percent.

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