1. Direct Use of Natural Gas

2. Tampa Electric Peoples Gas

3. 3 TECO Energy Tampa Electric 660,000 customers Over 4,400 megawatts of generating capacity Peoples Gas 330,000 customers Over 10,000 miles of distribution main and 113 miles of transmission main

4. Direct Use of Natural Gas Implications for Power Generation, Energy Efficiency, and Carbon Emissions Study Conducted by Black & Veatch Corporation February 2008

5. 5 Observations for Natural Gas Tight supply market Demand remains strong Use for power generation expected to increase significantly GHG emissions regulations likely to put further strain on the market Drivers of Natural Gas Demand Remain Strong

6. 6 Observations for Natural Gas Drivers of Natural Gas Demand Remain Strong Direct use of natural gas delivers 90% energy efficiency to end users – as compared to 27% end use efficiency when natural gas is used to generate electricity Direct use of natural gas in home heating and water heating results in 40% less CO2 emissions than electricity

7. 7 Study Objectives Analyze increased use of natural gas for power generation and impact on the natural gas market Assess impact of increasing direct use of natural gas for residential & commercial (R&C) end uses  Space Heating  Water Heating  Cooking  Clothes Drying Quantify impact of increased direct use of natural gas on  Energy Consumption  Total Energy Costs  CO 2 Emissions

8. 8 Analysis Approach Study Conducted by Black & Veatch

9. 9 Scenarios Assessed Reference Base Case 1. Current Supply/2006 R&C Technology/No CO 2 Restrictions Natural Gas Constrained World / High CO 2 Restrictions with: 2. 2006 R&C Technology or 3. High Technology (based on future efficiency targets) Natural Gas Surplus World / Low CO 2 Restrictions with: 4. 2006 R&C Technology or 5. High Technology (based on future efficiency targets)

10. 10 Study Findings Increased use of natural gas in R&C applications can  Decrease energy consumption  Decrease power generation needs  Reduce overall energy cost  Reduce CO 2 emissions

11. 11 Impact on Energy Consumption in 2030 Source: Energy Information Administration (“EIA”), B&V Analysis Increased Direct Use Of Natural Gas Reduces Total Energy Consumed A 50% shift of the switchable electric load to natural gas end use can produce: Energy Savings = 1.25 to 2.00 quadrillion Btu Avoided Generation capacity = 63 to 80 GW Avoided Investment costs = $49B to $122B

12. 12 Impact on Energy Costs in 2030 Increased Direct Use Of Natural Gas Reduces Total Energy Costs In supply-constrained/Lieberman-Warner CO 2 restrictions scenario, Energy Savings = $18B to $29B by 2030 Source: Energy Information Administration (“EIA”), B&V Analysis

13. 13 Impact on CO 2 Emissions in 2030 Source: Energy Information Administration (“EIA”), B&V Analysis Increased Direct Use Of Natural Gas Reduces CO 2 Emissions In all scenarios, projected decrease in CO 2 emissions From 60 million to 200 million tons

14. 14 Looking Forward Natural gas is the “bridge to the future” Demand is growing in all segments Supply access and infrastructure remain critical issues that must be addressed High and volatile prices are detrimental to consumers and the economy

15. Increased direct use of natural gas can make a significant positive impact on energy consumption, energy costs, and the environment