Wyoming Pipeline Authority

1. Wyoming Pipeline Authority August 24, 2004 Mark C. Moench John R. Smith Vice President and General Counsel Director, Regulatory and Governmental Affairs

2. Operational Highlights • System design is 1.75 Mdth/d. • Receipt point capacity is 3.95 Bcf/d. • Delivery point capacity is 5.70 Bcf/d, including 3.4 Bcf/d in California. • 97% of design capacity is contracted to California; • Delivery point capacity into SoCal is 1.385 Bcf/d. • Delivery point capacity into PG&E is .55 Bcf/d. • Post expansion load factor is 100.7% of design capacity. • Peak day delivery was 2,097,500 Dth on June 17, 2004. • Peak interruptible volumes reached 575 Mdth on July 8, 2004. • Average volume delivered to California delivery points is 1,420 Mdth/d • Capacity constraints of up to 300 Mdth/d persist at Wheeler Ridge and Kramer Junction, particularly in summer months.

4. Market Opportunities • 2 Bcf/d of California LDC core contracts will expire by August 2006. • 545 MMcf/d of non-core contracts held by SoCalGas will expire by August 2006. • The CPUC recently issued a proposed decision authorizing utilities to terminate contracts on El Paso, Transwestern and Gas Transmission Northwest, and approving an expedited process to grant pre-approval of new replacement contracts. • Supply diversity is a stated policy objective of the CPUC and the utilities. • Kern River will compete for re-contracting volumes as the utilities and the CPUC seek to achieve greater supply diversity.

5. Market Opportunities • 1,200 MW Moapa Power Plant - Nevada Power has announced it will purchase the plant from Duke and complete construction bymid-2006. 3.5-mile lateral to serve the plant is already constructed. • 1,050 MW Mountainview Power Plant (SCE) is under construction and will begin commercial operations by the second quarter 2006. • 750 MW Pastoria Power Plant (Calpine) will be placed into commercial operation in two phases – 250 MW by December 2004 and 500 MW by second quarter 2005. • Other announced power projects: • 525 MW Currant Creek Power Plant (PacifiCorp) is under construction. • PacifiCorp has announced that Summit Energy will construct the 535 MW Lake Side Power Plant in Utah County. • 500 MW Cosumnes (SMUD) will begin commercial operation by fourth quarter 2005.

6. 4 2 5 3 1 4 2 6 8 7 3 5 6 7 8 9 9 1 12 12 13 14 13 14 11 11 10 10 Kern River 2003 Expansion & New Power Plants Existing Compressor New Compressor 2003 Facility Additions: * 717 miles additional looping * 634 miles of 36” * 82 miles of 42” * 163,700 HP of compression POWER PLANTS Under Construction Recently Constructed Announced SALT LAKE CITY 15 Questar ML 104 272 MMCFD BAKERSFIELD LAS VEGAS PROJECT SPONSOR MWS Sunrise Edison Mission 320 El Dorado Reliant/Sempra 480 L.V. Cogen Black Hills 280 West Valley PacificCorp 168 La Paloma PG&E 1,124 Apex Mirant 550 High Desert Constellation 830 Sunrise Ph. II Edison Mission 265 Silverhawk Pinnacle West 570 Bighorn Reliant 570 Pastoria Calpine 750 Moapa Duke 1,200 Currant Creek PacifiCorp 525 Mountainview SoCal Edison 1,050 Lake Side Summit/PacifiCorp 535 TOTAL MWs 9,217 High Desert Lateral 282 MMCFD LOS ANGELES SoCal Gas Adelanto 500 MMCFD Questar’s ML 104 Lateral & Interconnect Kern River’s High Desert Lateral & Interconnect SoCal’s Adelanto Lateral & Interconnect Kern River Existing Kern River Expansion 15 Speaker Notes: ISO had record send out of over 44,000 MW in July 2004. Power demand is growing with economic recovery.

7. Expansion Opportunity • Route studies and cost estimates have been completed. • Kern River can be expanded by 200-500 MMcf/d at market tested rates. • An open season this winter, after the CPUC issues a final OIR Decision. • Construction is planned for 2007, with a November 2007 proposed in-service date. • 66-year proven reserve life in the Rockies, the strongest production growth profile and the most attractive pricing forecast of any supply basin in the lower 48 states. • California has 2.5 Bcf/d of expiring interstate capacity, no Rocky Mountain supply. • Supply diversity is important to 1) Promote gas-on-gas competition, 2) Provide price stability and 3) Increase infrastructure reliability • Utility re-contracting is an opportunity to achieve supply diversity and enhance pipeline infrastructure by providing contract support necessary for infrastructure investment. • A looped Kern River system will provide increased security, reliability and flexibility. • Kern River is well positioned and willing to invest in infrastructure enhancements. • Pipeline looping projects are predictable compared to new Westcoast LNG import terminals which have uncertainties associated with siting, licensing, gas interchangeability, safety and environmental concerns and political considerations.

8. California Regulatory Issues • A preliminary decision has been issued in the California OIR encouraging state utilities to de-contract on El Paso and Transwestern and recommending an expedited process to pre-approve new capacity. • The designation of primary vs. secondary receipt point rights at SoCalGas city gates should be immediately eliminated. • - Discriminates against new supplies, new pipelines and LNG imports. • - Restricts gas-on-gas competition and withholds lower cost gas. Favors southwest gas supplies from New Mexico and Texas. • - Creates a disincentive to construct new infrastructure, including Rocky Mountain supply that may seek markets to the east. • - Physical capacity of 300 MMcf/d exists today at the Kramer Junction which is being withheld from the market due to the primary/secondary receipt point issue. • - The CPUC has embraced non-discriminatory access; however, the implementation date remains uncertain. • SoCalGas proposes to implement an off-system service which will provide additional flexibility to Kern River shippers to manage load variations.

9. Wyoming Pipeline Authority August 24, 2004 Mark C. Moench John R. Smith Vice President and General Counsel Director, Regulatory and Governmental Affairs