1 Belle Mead Squibb 30"-36" R Windgap Hydrocarbon Research Trenton Whitman COLUMBIA GAS OF PENNSYLVANIA COLUMBIA GAS OF PENNSYLVANIA UGI GAS SERVICE CO. PENNSYLVANIA GAS & WATER CO. NORTH PENNSYLVANIA GAS CO. NEW JERSEY NATURAL GAS CO. SOUTH JERSEY GAS CO. PECO ENERGY. ELIZABETHTOWN GAS CO. N. J. NATURAL GAS CO. UGI GAS SERVICE CO. R R Hudson Marion Linden Regulator R R Montclair St. LNG Morgan ORANGE & ROCKLAND CO. MarketLink Expansion Project Zone I -Zone II -Zone III - 10 Yr - $ Yr - $ Yr - $ Yr - $ Yr - $ Yr - $ 0.34

2 MarketLink Expansion Project Opportunity Overview ENA MarketLink Position Market Analysis Economics Exit Strategy Background Information –Competition –Generating Plants

3 Opportunity Acquire capacity in constrained Transco Zone 6 New York market Premium priced pipeline Limited expansion of a highly utilized pipe (85+%) with high potential for demand growth Critical segment of market-area pipeline without long-haul cost risk

4 Pipeline Network Alliance Pipeline ANR SupplyLink Independence Pipeline Transco MarketLink Transco Mainline Gulf Coast Chicago Defiance, OH Leidy, PA Princeton Junction Linden Regulator New York City Canada All Projects Have Received FERC Certificates. No Regulatory Risk Leidy Interconnects with: Columbia Gas Dominion (CNG) Independence National Fuel Tennessee

5 MarketLink Overview Transco expansion from Leidy, PA to New York City by looping and adding compression approved by FERC on 4/26/00 700,000 Dthd total capacity increase in two phases Precedent Agreements with 7 shippers totaling 770,600 Dthd Engage (NY)Enron (NY)LFG EnergyDynegy Amerada Hess (NY)Sunset EnergyWilliams (NY) Tiered demand pricing structure –$0.18/Dth 100% load factor rate for deliveries south of Princeton Junction –$0.30/Dth south of Linden –$0.35/Dth north of Linden (Transco Zone 6 New York) First phase begins service 11/2001 with 280, ,000 Dthd depending upon final service agreements Only 200,000 Dthd primary into Transco Zone 6 New York market in first phase. Zone 6 NY volume limited by FERC filing to 394,000 Dthd.

6 ENA MarketLink Position Precedent Agreement executed 5/7/98 30,000 Dthd MDQ 10 year term starting in 11/2001 Primary delivery points as proposed –10,000 Con Ed (Z6 New York) –10,000 PSEG (Z6 New York) –10,000 Brooklyn Union (Z6 Non-New York)

7 Market Analysis Transco has high load factor –85% –84% 1998 –85% 1997 –82% 1996 –92% 1995 Transco allocated at the Linden regulator 92 days during the last winter and only allowed primary deliveries on 29 days NYISO condition that 80% of total load requirements must be sourced from in-City installed capacity (Locational Installed Capacity requirement) NYISO Locational Installed Capacity requirement for Long Island is 93%

8 Economics Mark to Market Value: $5.325 MM Basis Spread NPV ($0.0747/Dth) $135K - $1.884 MM Spread Option NPV ($ $0.025/Dth) Based on $0.3004/Dth 100% load factor demand, $0.0041/Dth demand & commodity surcharges and 0.84% fuel

9 Additional Value Opportunity Cumulative intra-month balancing on contract up to 5% of volumes transported (up to 46,500 Dth on ENA volume) Intra-day balancing on contract up to 10% of MDQ Ability to segment capacity and transport from Non- New York pooling point to deliveries south of Princeton Junction Backhaul to Transco Zone 5 or Zone 4 during periods of forward haul constraint within these zones

10 Exit Strategy MTM economics are positive for entire term, but potential risk mitigation for out years: Utilize capacity during first three to five years of contract and flip to an Enron or third party electric generation project Leverage contractual asset into New England delivery through asset management of New York player with Iroquois capacity or other New England deliveries Release capacity or make delivery to retail marketer who requires firm delivery into Transco Zone 6 New York market

11 Competition - Iroquois Eastchester Extension Project filed with FERC on 4/28/00 expands Iroquois by 220,000 Dthd Expands mainline capacity and extends system from Northpoint, Long Island through the Long Island Sound to connect with Con Ed in the Bronx Additional supplies to come from Waddington Two phase project in which first phase supplies 70,000 Dthd to Orion’s Astoria Generating project by 4/2002 Remaining capacity would be in place by 11/2002 Executed Precedent Agreements with Astoria, Con Ed, Keyspan Ravenswood, Engage Energy and Riverbay Corporation

12 Competition - Millennium Columbia/MCN/TCPL/Westcoast partnership project filed with FERC on 12/22/97 for 700,000 Dthd Pipeline would transport from Dawn to New York City Project in jeopardy due to NiSource acquisition of Columbia and right-of-way problems in New York Project may not get approvals for deliveries into NYC Scheduled to access electric generation projects above NYC

13 NYC Generation Plants Pending NYC Electric Generating Facility Applications before the New York State Siting Board Estimated MWDeveloper In-Service Date Astoria Energy1000SCS Energy3Q 2003 East River Repowering 360Con Ed2Q 2002 Poletti Station Expansion 500NYPA3Q 2002 Ravenswood Cogen 250Keyspan3Q 2002 Sunset Energy Fleet, LLC 520SEF2002 Oak Point Energy1075Oak Point, LLC4Q 2003

14 Regional Generation Plants Planned Generation Capacity Additions in the NPCC and PJM regions close to Transco Estimated MWDeveloper In-Service Date Linden 125Cogen Tech2001 Linden1100PG&E2Q 2003 Linden1100PSEG2Q 2003 Mantua Creek 800PG&E2Q 2002 Eden Township 90PPL Global2Q 2002