Payment Channels A Case Study of Payment Practices Julie Compton Pellizzi Project Leader Customer Solutions Technology

About AGL Resources Headquartered in Atlanta, Georgia Approximately 2,400 employees Serves more than 2.2 million average customers through natural gas utilities in six states Largest marketer in Georgia under the Georgia Natural Gas brand through majority ownership of SouthStar Diversified operations include asset management with Sequent Energy Management and gas storage projects in Louisiana and Texas.

About AGL Resources Atlanta Gas Light Chattanooga Gas Elizabethtown Gas Elkton Gas Florida City Gas Virginia Natural Gas

Distribution Operations ETG Elkton VNG CGC AGL FCG

Atlanta Gas Light More than 1.5 million average customers as of June 30,2007 Function to sell retail natural gas deregulated since 1997 Currently 12 marketers

Chattanooga Gas 62,000 average customers as of June 30, 2007 Serves Hamilton and Bradley counties in southeast TN

Elizabethtown Gas 272,000 average customers as of June 30, 2007 Serves Union, Middlesex, Sussex, Warren, Hunterdon, Morris and Mercer counties

Elkton Gas 6,000 average customers as of June 30, 2007 Serves Greater Elkton on Maryland’s Eastern shore

Florida City Gas 104,000 average customers as of June 30, 2007 Serves Miami-Dade and Brevard counties

Virginia Natural Gas 271,000 customers as of June 30, 2007 Serves Southeastern VA

Electronic Commerce 7,806,447 = EDI transactions for 2006 Supply Chain Purchase Orders Invoices Vendor Payments

Electronic Commerce – Part Two North American Energy Standards Board (NAESB) Transactions Available No-Notice Withdrawal for Operator – G873ANNW & G873ANNI Pre-Determined Allocation – G873PDAL Request for Confirmation – G873RQCF Confirmation Response – G873RRFC Scheduling – G873SQOP Enrollments / Response – Original, Changes and Drops Historical and Monthly Meter Usage - 867 Energy Service Provider Invoicing & Application Advice – 810 & 824

Electronic Commerce – Part Three How do we handle customers’ gas payments? How do we incorporate six utilities’ regulatory requirements? Multiple Channels Lockbox Electronic Walk-in Collection Agencies

Natural Gas Payments Payment Methods Payment Types ACH/CTX/CIE – various online banking tools or corporate functions IVR - Speedpay Web - Speedpay Recurring – authorized monthly withdrawals Payment Types ACH (checking, savings, money market) Credit Cards, ATM Cards, Pin-less Debit Cards

Payment Partners Over 180,000 transactions/month: Certegy (Fidelity BillPay®) CheckFree CheckFreePay Global Express MasterCard RPPS® Metavante Online Resources WesternUnion® Speedpay® Western Union Speedpay is a registered service mark of E Commerce Group Products, Inc.

AGL Resources Case Study Payment practices using Western Union Speedpay Ten + years ago – “check by phone” concept patented Check writing software installed – DOS based Physically printed checks and mailed to lockbox Upgraded to Windows version Migration to the Speedpay ASP extranet application

Service Overview Many channels maximize payment acceptance capabilities AGL Resources

Service Overview 05/03: Chattanooga Gas (CGC) & Virginia Natural Gas (VNG) Go Live on Extranet 01/05: VNG adds IVR & Internet Channels 03/05: CGC adds IVR & Internet Channels 06/05: Elkton Gas, Elizabethtown Gas & Florida City Gas Go Live on Extranet, IVR & Internet 09/06: Rollout of payments accepted via API

Electronic Payment Volume May 2003 – May 2007 YEAR VOLUME 2003 - 2004 61,538 2004 - 2005 113,236 2005 - 2006 319,793 2006 - 2007 387,903

Payment Trends Distribution of electronic payments by type 2003 - 2004 2004 - 2005 2005 - 2006 2006 - 2007 CSR ASSISTED 100% 85% 39% 31% SELF SERVE 0% 15% 61% 69%

Payment Trends Distribution of electronic payments by interface 2003 - 2004 2004 - 2005 2005 - 2006 2006 - 2007 Channel % CSR 100 IVR WEB API Channel % CSR 85 IVR 7 WEB 8 API Channel % CSR 39 IVR 25 WEB 36 API Channel % CSR 17 IVR 21 WEB 48 API 14

Payment Trends Distribution by payment type 2003 - 2004 2004 - 2005 2005 - 2006 2006 - 2007 PMT % ACH 100 ATM CARD PMT % ACH 68 ATM 2 CARD 30 PMT % ACH 58 ATM 6 CARD 36 PMT % ACH 60 ATM 6 CARD 34

Electronic Volumes Before & after fee addition 03/05: Same Fee Across all Channels* YEAR 2003 - 2004 2004 - 2005 2005 - 2006 2006 - 2007 VOLUME 61,538 113,236 319,793 387,903 * With the NUI acquisition, some payments were coming in through another vendor, but were migrated to Speedpay

Current & Future Initiatives Web Services Real-time integration via Web services Current Initiatives Performs Web service call to execute a payment transaction Future Initiatives Account validation lookup using a Web service call

Current & Future Initiatives Flexible Pricing Models Continue to refine payment options Modification to payment model possible Customer service portal Electronic Bill Presentment

Current & Future Initiatives Potential Additional Channels Online Banking Payments Recurring Payments Outbound Messaging Can be integrated with payment IVR Mobile/SMS Payments Electronic Bill Presentment

Current & Future Initiatives Consumer Marketing Campaign Assistance Create awareness & educate consumers Past and future plans service: *Postcards/Direct Mail *Couponing *Statement Messaging *Web Messaging *Email Messaging *Bill Stuffers *IVR Messaging *Magnets

Current & Future Initiatives Consumer marketing campaign assistance