City of Palm Coast Peoples Gas Franchise Agreement

Proposal Proposal: Natural Gas Pipeline: 48.5 mile comprised of 8/6/2 inch steel and plastic mains linking the south end of the Jacksonville Division’s system to the north end of the Daytona Division’s system. Project Timeline ($7.9M): Twenty-Four (24) to Thirty-Six (36) Month Build-Out, Project Cost: Total Capital – $21.5M  $3.3M*  $3.4M*  $1.2M*  2011 – $13.6M Purpose: Establish a secure growth territory for Peoples Gas System Eliminate any 3 rd Party competitive position in a county recognized as one of the fastest growing in the United States including: Florida Gas Transmission - (Pipeline Supplier) City of Palatka Natural Gas System – (Municipal Gas System) Enhance the reliability of the Jacksonville and Daytona Distribution System by providing system hardening through back-feeding and looping opportunities of both distribution systems.

SERVICE TERRITORY Territorial area: 45 miles long-18 miles wide Tariff and franchised service area: 810 square miles Targeted service areas: St. Johns, Flagler and Volusia Counties, Flagler Beach, St. Augustine Shores, Palm Coast, Fort Matanzas, Crescent Beach, Bunnell, and Ormond Beach.

Agreement 6% franchise fee on total sales within the City of Palm Coast Lines to extend West to East on Palm Coast Parkway State Road 100 All required permits and fees will be acquired prior to construction Benefits: Green – Environmentally Friendly source of energy Reduced Costs as compared to Propane