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UGI Choice Program Update

UGI Choice Program Update. Shaun Hart Thursday, February 23, 2012. Agenda. Current Choice programs 2011 PGC settlement Summary of new program structure UGI Utilities (“UGI”) UGI Penn Natural Gas (“PNG”) UGI Central Penn Gas (“CPG”) Core market capacity contracts Choice statistics.

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UGI Choice Program Update

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  1. UGI Choice Program Update Shaun Hart Thursday, February 23, 2012

  2. Agenda • Current Choice programs • 2011 PGC settlement • Summary of new program structure • UGI Utilities (“UGI”) • UGI Penn Natural Gas (“PNG”) • UGI Central Penn Gas (“CPG”) • Core market capacity contracts • Choice statistics

  3. Current Choice Programs

  4. UGI Current Program * Option II was the default selection. Election due date was July 15th.

  5. PNG Current Program * Option II was the default selection. Election due date was March 1st.

  6. CPG Current Program

  7. 2011 PGC Settlement

  8. 2011 PGC Settlement • July 15th election date for all 3 companies • Demand charge credit • UGI and PNG only • December 2011 through October 2012 • Bundled sale changes effective November 2012 • Peak day allocation percentages • Daily flexibility

  9. Peak Day Allocation • Current peak day allocation • Firm transportation • Bundled sales • New peak day allocation • Firm transportation • Bundled sales • Peaking sales

  10. Current Peak Day Allocation * Percentage of Peak Day DDR

  11. New Peak Day Allocation * Percentage of Peak Day DDR

  12. Bundled Sales • Current bundled sales • Must-take monthly and daily quantities • Percentage of pre-month DDR for Average January Day option (Option II) • Percentage of DDR for Peak Day option (Option IV) • New bundled sales • Must-take monthly bundled sale quantity • Daily flexibility

  13. Must-Take Bundled Sales * Percentage of pre-month average DDR x number of days in month

  14. Maximum Daily Bundled Sale * Percentage of peak day bundled sale quantity

  15. Minimum Daily Bundled Sale * Percentage of peak day bundled sale quantity

  16. Bundled Sale Example #1 Company = PNG Month = January Pre-month average DDR = 500 dth per day Peak Day DDR = 1,000 dth • Must-take monthly bundled sale = 8,370 dth (54% * 500 dth * 31 days) • Max daily bundled sale = 560 dth (100% * 56% * 1,000 dth) • Average daily bundled sale = 270 dth (8,370 dth ÷ 31 days) • Min daily bundled sale = 0 dth (0% * 56% * 1,000 dth)

  17. Bundled Sale Example #2 Company = UGI Month = March Pre-month average DDR = 300 dth per day Peak Day DDR = 1,000 dth • Must-take monthly bundled sale = 4,092 dth (44% * 300 dth * 31 days) • Max daily bundled sale = 182 dth (65% * 28% * 1,000 dth) • Average daily bundled sale = 132 dth (4,092 dth ÷ 31 days) • Min daily bundled sale = 0 dth (0% * 28% * 1,000 dth)

  18. Bundled Sale Nominations • 8:45 a.m. EST nomination deadline • If no nomination is received by deadline,default nomination quantity = 0 • If monthly quantity is not fully nominated, shortfall will be cashed-in • UGI has right to issue OFO to modify daily flexibility of bundled sales (slide #14)

  19. Peaking Sales • If DDR exceeds peak day FT allocation plus Bundled Sales allocation • UGI >80% of PDDR • PNG >91% of PDDR • CPG >95% of PDDR • Sale price = peaking commodity cost • Current rates (subject to change) • UGI: NYMEX Settle x 1.1628 • PNG: Transco Zone 3 GDA x 1.06 • CPG: Dominion South Point GDA

  20. Summary of New Program Structure

  21. UGI Choice

  22. UGI Capacity Options * Option II is the default selection. ** Elections are due July 15, 2012 and each July 15th thereafter.

  23. UGI Capacity Releases • Texas Eastern (45%) • ELA to M3 • Columbia (45%) • Columbia Gulf (Rayne to Leach) • Tennessee (Zone 0 to Broad Run) • Transco (10%) • Leidy to Zone 6

  24. PNG Choice

  25. PNG Capacity Options * Option II is the default selection. ** Elections are due July 15, 2012 and each July 15th thereafter.

  26. PNG Capacity Releases • Dependent on location of customer • Honesdale (100% Tennessee) • North (56% Tennessee, 44% Transco) • Central and South (100% Transco) • Tennessee • Zone L to Zone 4 • Transco • Zone 3 to Zone 6

  27. CPG Choice

  28. CPG Capacity Options * Option II is the default selection for Nov 2012 forward. ** Elections are due July 15, 2012 and each July 15th thereafter.

  29. CPG Capacity Releases • Dependent on location of customer • Columbia • Rayne to Leach • Leach to CPG • Tennessee – Zone L to Zone 4 • Texas Eastern – ELA to M3 • Transco – Zone 3 to Zone 6

  30. Core Market Capacity Contracts

  31. UGI Capacity Contracts

  32. UGI Capacity Contracts • Renewals • Columbia FTS K#80021 renewed through May 2020 • Texas Eastern FT and CDS extended one year • Transco ESS and SS-2 extended one year • RFP results • November 2011 – RFP for Peaking Service to replace two contracts set to expire March 31, 2012 • New peaking contracts effective Nov 1, 2012 • 34,500 dth/day through March 2013 • 40,000 dth/day through March 2017 • Upcoming decisions • Extend Transco ESS and GSS storage contracts • Texas Eastern LLFT contracts notice due by Nov 2012

  33. UGI Capacity Contracts – Pg. 1

  34. UGI Capacity Contracts – Pg. 2

  35. PNG Capacity Contracts

  36. PNG Capacity Contracts • Renewals • Transco FT extended one year • RFP results • October 2011 – RFP to replace 74,000 dth/day of long-haul capacity on Transco and Tennessee set to expire in 2015 • 40,000 dth/day firm Marcellus supply • 31,500 dth/day effective January 1, 2012 • Increases to 40,000 dth/day effective August 1, 2015 • 34,000 dth/day of Tennessee short-haul capacity (Zone 4-4) • Upcoming decisions • Extend Transco GSS, LSS, and SS-2 storage contracts

  37. PNG Capacity Contracts

  38. CPG Capacity Contracts

  39. CPG Capacity Contracts • Renewals • Dominion FT extended one year with lower MDQ • Tennessee FT extended one year with lower MDQ • Texas Eastern FT and CDS extended one year • Transco FT extended one year • RFP results • Sept 2011 – RFP for peaking service for Nov 2011 through March 2012 • Upcoming decisions • Extend UGI Storage contract • RFP’s for peaking service effective Nov 2012

  40. CPG Capacity Contracts

  41. Choice Statistics

  42. Choice Statistics • Choice % of core market peak day (Feb 1, 2012) • 22% on UGI • 10% on PNG • 8% on CPG • 100% FT Option I not viable as Choice grows • Choice supplier defaults on UGI and PNG • 80 occurrences in 153 days from Sept 1, 2011 through Jan 31, 2012 (52% of days)

  43. Contact Information Shaun Hart David Lahoff Manager – Supply Manager – Rates SHart@ugi.comDLahoff@ugi.com 610-796-3522 610-796-3520

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