Florida Gas Utilities July 12, 2006 Meeting

1. Florida Gas UtilitiesJuly 12, 2006 Meeting

2. Cautionary Statement Regarding forward-looking statements This presentation includes statements that do not directly or exclusively relate to historical facts. Such statements may be considered "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Those statements represent Gulfstream’s intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors, many of which are outside Gulfstream’s control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. Those factors include: state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an impact on rate structures, and affect the speed at and degree to which competition enters the electric and natural gas industries; industrial, commercial and residential growth; the influence of weather and other natural phenomena on company operations, including the economic, operational and other effects of hurricanes; general economic conditions, including any potential effects arising from terrorist attacks and any consequential hostilities or other hostilities or other external factors over which Gulfstream has no control; changes in laws and regulations; and the results of financing efforts, including Gulfstream’s ability to obtain financing on favorable terms. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than Gulfstream has described. Gulfstream undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

3. Agenda:Gulfstream overviewExpansion projectsView on energy solutions George Matzke Vice President Marketing

4. Company Overview - Introduction • Placed into service in May 2002, Gulfstream is a state-of-the-art interstate natural gas transmission system owned 50% by an affiliate of Duke Energy and 50% by an affiliate of Williams • The Company is under the joint management of Duke Energy, which provides the business functions, and Williams, which provides the technical functions • Gulfstream was specifically designed to serve peninsula Florida • The Pipeline consists of 692 total miles: onshore in Florida (242 miles), Alabama and Mississippi (15 miles) and offshore in the Gulf of Mexico (435 miles) • Compression consists of three Rolls Royce compressors, one of which serves solely as back –up (113,700 total horsepower) – located in Coden, Alabama • The Company’s customer base includes electric utilities, municipals, and local distribution companies in central and south Florida.

5. Company Overview - Introduction • Recent history • 2005 • Phase II placed in service: February 2, 2005 • Increased delivery points from 17 to 19 • Summer peak day (August): 1,121,000 Dth/d • Contracted long-term firm transportation service, increased to 753,000 Dth/d • 2006 • Phase III with Florida Power & Light announced March 2006 • Phase IV with Progress Energy announced May 31, 2006 • Contracted long-term firm transportation service increases to 1,253,000 Dth/d

6. Company Overview: Map of Operations

7. Company Overview: Summer Operations • 2004 & 2005 Gulfstream experienced seven storms directly impacting its market area and/or making landfall near Coden, Alabama • Bonnie, Arlene and Dennis crossed our offshore pipeline • Charlie, Frances, and Jeanne crossed our market system • Ivan made landfall near Mobile Bay and our compressor operations • Gulfstream’s pipeline facilities sustained no material damage • Required surveys indicate offshore pipeline has not moved • Post 2004 Gulfstream purchased & installed additional emergency generation at key communication points • Gulfstream’s electric generation at Coden, AL and Gas Treating Facilities were critical components of reliable service • June 1, 2006 fuel retention reduced from 1.53% to 1.34%

8. Market Overview: Strong population growth and natural gas demand 2004 - 2014 Annual population & gigawatt peak demand growth • Florida’s population is growing 2% annually • Electric demand is growing 3% annually • Natural gas continues as fuel of choice for new generation in the near term • Central and Southern Florida accounts for most of the load growth – the market Gulfstream was designed to serve • Population (millions) • Gigawatts Population data from U.S. Census Bureau, April 2005 Growth in natural gas generation (MWh by fuel type) Oil7.1% Oil12.2% Natural Gas29.9% Natural Gas44.5% Nuclear10.1% Nuclear13.4% Other7.6% Other15.1% Coal29.4% Coal30.7% Current 2014 Projected Source: 2005 Regional Load and Resource Plan – Florida Reliability Coordinating Council Population and power generation growth in Gulfstream’s market is expected to drive increased demand for natural gas

9. Market Projects • Phase III: Florida Power & Light • The project will sell out Gulfstream’s initial mainline capacity • Project summary: • 35 mile, 30” diameter pipeline extension to FP&L’s new greenfield 2200 MW West County Energy Center in west Palm Beach County • Completion of facilities in 2008 • Phase IV: Progress Energy (Florida Power Corp) • Project expands mainline capacity to 1,253,000 Dth/d • Project summary: • 18 miles; 20” diameter pipeline extension to FPC’s “repowered” Bartow power plant in southern Pinellas County • 45,000 h.p. compression addition to existing Gulfstream sites near Coden, Alabama, and in Manatee County, Florida • Completion of facilities in 2008

10. Gulfstream Market Area (including Phase III & IV)

11. Market Area Conclusions • Florida’s growth in population and electric demand requires substantial new pipeline capacity • Gulfstream has been successful in serving significant new demands including its recently announced Phase III & IV expansions • Gulfstream will continue to be part of the growing energy delivery system in Florida and looks forward to using its capabilities and expertise to increase the amount of natural gas delivered • Gulfstream is also focused on diversifying and enhancing its supply connections • Conclusion: Pipeline capacity will be available; but, where will the incremental supply be sourced to satisfy Florida demands?

12. Gulfstream Current Supply Connections Direct Indirect • Utilities have the option of buying supplies from a wide range of producers in the Eastern Gulf of Mexico with direct and indirect access to Gulfstream • However, peninsula fuel buyers are increasingly concerned over offshore gas supply reliability during hurricanes • Good news - growth in Florida is promoting the development of additional supply initiatives to enhance liquidity and supply performance especially during hurricane season

13. Supply Initiatives Proximate toGulfstream’s System – three main types • Development of new high-deliverability onshore storage will provide additional reliability to meet peak needs • Development of Texas & Louisiana supply projects will add new sources of hurricane resistant supplies & liquidity to Gulfstream’s customers • Development of LNG import terminals will provide a substantial source of long-term, incremental supply

14. LNG Facilities in North America: Existing and Proposed (January 2006) • Atlantic LNG • Bahamian LNG • Eastern Gulf of Mexico LNG Existing Proposed Approved Source: Cambridge Energy Research Associates.

15. Landscape -- Focus on SE Markets Southeast Supply Header 0.8 bcf/d to 1 bcf/d to Guflstream and SE markets Gulf South 1.0-1.5 bcf/d from Carthage to Perryville to SE markets Enbridge Pipeline Up to 1.0 bcf/d from Texas to Mississippi El Paso Continental Connector 0.5 bcf/d to SE markets Cypress Pipeline 0.22 bcf/d from Elba Island to FGT Elba Express AGL Cove Point LNG Lebanon El Paso Continental Connector Project Elba Express Southeast Supply Header AGL Elba Island LNG Gulf South Cypress Pipeline Enbridge Pipeline

16. Landscape - Storage • 1 -DEGT Copiah (salt) • 7-14 Bcf working • 2 - DEGT County Line (salt) • 6-18 Bcf (delayed) • 3 - Caledonia (reservoir) • 11 Bcf working • 4 – Energy South Bay Gas (salt) • 12 Bcf working • 5 - Falcon Gas MoBay Gas (reservoir) – 12 Bcf working • 6 - SGR Southern Pines (salt) • 16 Bcf working • 7 - Enterprise Petal (salt) • 20 Bcf working • 8 - Gulf South Magnolia (salt) • 9 - Bobcat Storage – Port Barre (salt) • 10 - AGL Jefferson Island (salt) • 10 Bcf working • 11 - Plains All-American Pine Prairie (salt) • 17 Bcf working • 12 – Starks (salt) • up to 19 Bcf working • 13 - Sempra Liberty (salt) • 17 Bcf working • 14 – Gulf South Bistineau Storage (reservoir) 3 14 1 4 2 7 6 11 9 12 8 5 10 13

17. 3 Keys to Future Gulfstream Expansion • Traditional long-haul expansions created through combination of pipeline looping and compression • LNG re-gas expansions and new large supply and storage projects benefited from large diameter, high pressure system and excellent shore approaches in MS, AL and FL • Market expansions benefited from large diameter system with good east-to-west coverage of the FL peninsula and potential for compression expansion to serve high-pressure electric turbine applications

18. Gas Supply Conclusions; four-prong approach needed • Storage and other supply enhancements will improve supply performance during hurricane season as well as help electric utilities better manage gas buying practices with weather sensitive demands • New major supply initiatives from Texas, & Louisiana; and • Imported LNG will help improve reserve life, supply performance, and liquidity either through traditional long-haul expansions or through market-area expansions • Traditional offshore supplies and access to new lease sales will be important contributors to Florida’s energy security Gulfstream has made significant improvements to Florida’s energy infrastructure over the last four years and is positioned by location and capability to further enhance Florida’s energy security