1. October 9, 2014 Kenneth W. Yagelski Managing Director Gas Supply
LDC Procurement and Hedging: 2013 Recap and Preparing for Winter 2014 – American Gas Association Seventh Annual Energy Market Regulation Conference
October 9, 2014
Kenneth W. Yagelski
Managing Director Gas Supply

2. About the Company
AGL Resources (NYSE: GAS) is an Atlanta-based energy services holding company with operations in natural gas distribution, retail operations, wholesale services and midstream operations. AGL Resources serves approximately 4.5 million utility customers through its regulated distribution subsidiaries in seven states. The company also serves approximately 630,000 retail energy customers and approximately 1.2 million customer service contracts through its SouthStar Energy Services joint venture and Pivotal Home Solutions, which market natural gas and related home services. Other non-utility businesses include asset management for natural gas wholesale customers through Sequent Energy Management and ownership and operation of natural gas storage facilities. AGL Resources is a member of the S&P 500 Index. For more information, visit

3. What did the natural gas industry experience last heating season?
A Look Back
What did the natural gas industry experience last heating season?

4. A Return to “Normal” Weather
Source: NOAA – National Weather Service

5. Storage Inventories Influenced by Demand and Markets
Source: DOE - Energy Information Administration

6. Henry Hub (NYMEX) Price Stability
Historical (Actual) Forecast (Forward Market)
Source: Energy Information Administration and Historical Market Data

7. Market Area Price Instability
Source: Historical Market Data

8. Henry Hub Differentials Have Reversed
Source: Historical Market Data

9. How do you address the complex situation?
The Plan Going Forward
How do you address the complex situation?

10. Capturing Value: Forward Commodity Prices
Physical supply hedges from investments in natural gas reserves
New legislation in Virginia (HB 949 and SB 519) signed into law on July 1, 2014 allows natural gas distribution companies to make investments in natural gas production and related infrastructure.
Costs recovered through the utility’s gas cost component of its current rate structure.
Projects must meet any or a combination of the following criteria:
Savings in the cost of gas compared to current long-term projections.
Produces a reduction in price volatility in the utility’s overall natural gas supply portfolio.
Causes a reduction in the utility’s overall natural gas supply risk.

11. Capturing Value: Stranded Production
Production area diversification through midstream investments
Strategic investments in pipeline infrastructure to help relieve currently existing capacity constraints that strand production.
New access to production areas may help address issues with supply reliability, upstream capacity constraints, supplier diversity, credit risk, pricing stability, and the local distribution company’s weighted-average cost of gas.

12. Dalton Expansion Project
Project Summary
448,000 Mcf per day capacity
106 mile greenfield pipeline with one gas-fired compressor site
Includes expansion of Transco Main Line from Station 210 (NJ) to points south
Access to Northeast Pennsylvania’s prolific Marcellus Shale production area via the Transco Main Line
Direct connection to key LDC and power generation demand markets in the Southeast United States
Partnership with AGL Resources and Williams Partners (Transco)
May 2017 in-service date

13. PennEast Pipeline Project Summary
800,000 Mcf per day capacity, expandable to 1.2 Bcf per day
105 mile greenfield pipeline with three gas-fired compressor sites
Access to Northeast Pennsylvania’s prolific Marcellus Shale production area
Direct connection to key LDC and power generation demand markets in the Mid-Atlantic United States
Access to downstream demand markets in Northeast and Southeast
Partnership with AGL Resources, NJR Energy Services, Public Service Enterprise Group, South Jersey Industries, and UGI Energy Services
November 2017 in-service date

14. Atlantic Coast Project
Project Summary
1.5 Bcf per day capacity
550 mile greenfield pipeline with three gas-fired compressor sites
Access to prolific Marcellus and Utica Shale production areas in Ohio, Pennsylvania, and West Virginia
Direct connection to key LDC and power generation demand markets in the Mid-Atlantic and Southeast United States
Partnership with AGL Resources, Dominion Transmission, Duke Energy, and Piedmont Natural Gas
Late 2018 in-service date

15. For more information, please contact: Ken Yagelski Managing Director Gas Supply AGL Resources