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Natural Gas Market Dynamics

Natural Gas Market Dynamics. Price Volatility Supply and Demand Fundamentals Dominion East Ohio Market. Price Volatility. Source: www.hessenergy.com. Source: www.hessenergy.com. Source: www.nymex.com. June 2, 2009 Gas Daily Headlines. NYMEX leaps 41.4 cents, but cash prices weaken

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Natural Gas Market Dynamics

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  1. Natural Gas Market Dynamics • Price Volatility • Supply and Demand Fundamentals • Dominion East Ohio Market

  2. Price Volatility

  3. Source: www.hessenergy.com

  4. Source: www.hessenergy.com

  5. Source: www.nymex.com

  6. June 2, 2009 Gas Daily Headlines • NYMEX leaps 41.4 cents, but cash prices weaken • “the NYMEX price soared ‘for no good reason’ given that fundamentals have not changed much from last week.” • Bears in control as new hurricane season begins • “nothing - save a catastrophic hurricane … - should prevent gas prices from falling even further this summer” • S&P: Outlook murky for North American gas sector • “the key for oil and gas is the development of demand, and demand right now is heading downhill…” See: www.platts.com

  7. Key Drivers

  8. Weather-Normalized R&C Demand Is Less Source: www.eia.doe.gov

  9. Industrial and Power Generation Demand Is Much Less Source: www.eia.doe.gov

  10. Source: EIA Natural Gas Year In Review 2008

  11. Source: www.bakerhughesdirect.com

  12. Key Drivers: Domestic Production Source: www.eia.doe.gov

  13. Source: EIA Annual Energy Outlook 2009

  14. Source: FERC Natural Gas Market Overview (12/5/08)

  15. Source: www.eia.doe.gov

  16. Source: www.eia.doe.gov

  17. Source: rexpipeline.com

  18. Dominion East Ohio Market

  19. Energy Choice Enrollments

  20. Pre-SSO (9/06) to Today (12/08)

  21. Energy Choice Market Shares – 12/08 Other 13 F E D Aggregation (36%) C B A Energy Choice Participation Rates: Residential Non-PIPP: 78% Nonresidential: 75%

  22. What is Dominion Doing Now? • Dominion is continuing its transition from traditional regulated natural gas sales to a more competitive market for its customers • Dominion will continue to focus on providing regulated distribution service to its 1.2 million customers • Dominion conducted its first Standard Service Offer auction in August 2006 to purchase natural gas for its sales customers • In February 2009, Dominion conducted two more auctions for Standard Service Offer (SSO) and Standard Choice Offer (SCO) commodity service • In April 2009, Dominion placed all Choice-eligible customers into a direct retail relationship with an Energy Choice supplier at the SCO rate established in the auction • SSO/SCO auction process will be repeated in 2010

  23. Residential/Small Commercial www.dominiongaschoice.com Larger Commercial/Industrial www.dom.com

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