1. Why Natural Gas & Is It Available? 10-11-12 Daniel Adamo Business Development Director

2. Why Natural Gas?  UGI Information  Why Natural Gas  Is Gas Available  Local Fuel Switching Examples  Marcellus Shale and the Commonwealth Pipeline  Discussion

3.  UGI Utilities, Inc. is a natural gas and electric utility headquartered in Reading, PA  Made up of four companies that distribute natural gas and electricity serving customers in Pennsylvania and Maryland: –UGI Gas Service (UGI) –UGI Penn Natural Gas (PNG) –UGI Central Penn Gas (CPG) –UGI Electric UGI Utilities

4. UGI Service Territory

5. 89% Residential 11% Industrial/Commercial Total Annual Gas Sales: ~ 154 BCF (billion cubic feet) Total Annual Electric Sales: ~ 970 GWH (millions of kilowatt hours) UGI Utilities Gas Main Infrastructure: ~ 12,000 miles Largest Gas Utility in Pennsylvania UGI Utilities – Customer Mix

6. Why Natural Gas?  Unique Situation – Oil Prices Remaining High – Natural Gas Prices at Historic Lows – Natural Gas is an American/Pennsylvania Fuel  Economics – UGI Calculator – Commercial www.ugi.com/businesscalculator Oil Prices seen over the past winter – $3 to $4 per gallon (eq $22 to $30 per Mcf) Natural Gas Prices (Commodity/Distribution) – $6 to $8 per Mcf (eq $0.81 to $1.08 per gal of oil) Average Savings – $12,000 / yr – Estimated - 7,000 gallons of oil @ $2.85 / gal for a system greater than 10 years old

7. Why Natural Gas?

8. Is Natural Gas Available?  Natural Gas Distribution System – Is there an existing gas main available in front of or close to property requesting gas service  Tariff – Economic Justification – Core Customers – UGI is regulated by the Pennsylvania Public Utility Commission – Tariff Guidelines Apply – Extension Language – Core Customers (existing customers) can not be harmed by adding new customers Customer contributions are sometimes required to aid in extending natural gas service Contributions can make justification to convert difficult if a significant gas main extension is required  Next Steps

9. Is Natural Gas Available?  UGI’s GET-Gas (Growth Extension Tariff) Pilot – Works for down-the-street, or next town over – Utility can make reasonable market assumptions regarding the potential and timing for new customer connections – Innovative extension funding approach allows new customers to use portion of savings from conversion to natural gas service, in particular, from fuel oil – Minimizes any funding burden on existing customers

10. Is Natural Gas Available? GET Gas –Incremental customer surcharge covers gas main extension –Supported by reasonable assumptions for future customer potential –Incremental investments are recovered by surcharge to new residential/small commercial customers being added to gas main extended via GET Customer savings more than offset this incremental charge –Customers added by GET pay a premise-based multi-year surcharge –‘Keystone’ allowances for larger anchor customers

11.  UGI added 14,000 residential and 2,011 commercial customers in 2012  UGI did spend $44.4 million extending natural gas service to customers in 2012  In 2012, UGI did set a record of adding 11,316 households that converted to natural gas from oil, electricity, propane, etc.  In the past year more than 170 businesses converted to natural gas in the Greater Reading Area Fuel Switching Example

12. ProjectPotential Savings Over Current Fuel E.J. Breneman, LP34 % Bulk Chemicals, Inc.57 % Misco Products58 % Twin Valley High School62 % Current Local Fuel Switching Examples

13. Click to edit Master title style Click to edit Master text styles o Second level Greater Berks County Chamber of Commerce

14. Click to edit Master title style Click to edit Master text styles o Second level Project Partnership 14 Capitol Energy Ventures

15. Click to edit Master title style Click to edit Master text styles o Second level The Pipeline Details 120 miles of 30-inch pipe 800,000 dekatherms per day of capacity In-service in 2015 Will cross and interconnect with several existing interstate natural gas pipelines 15

16. Click to edit Master title style Click to edit Master text styles o Second level The Pipeline Route Commences at the southern terminus of Inergy’s new MARC I Pipeline in Eastern Lycoming County. Crosses Lycoming, Columbia, Montour, Northumberland, Schuylkill, Berks, and Chester Counties; subject to final route adjustments. 16

17. Click to edit Master title style Click to edit Master text styles o Second level The Pipeline Route 17

18. Click to edit Master title style Click to edit Master text styles o Second level Serving High-Growth Mid-Atlantic Markets Offers greater supply diversity for the demand market Provides access to Pennsylvania’s plentiful Marcellus Shale natural gas production Provides producers with access to demand markets currently served through existing interstate pipelines 18

19. Click to edit Master title style Click to edit Master text styles o Second level Reaching Markets Points of interconnection planned with: o Transco Gas Pipeline in Lycoming and Chester Counties o Texas Eastern Transmission Company in Berks and Chester Counties o Columbia Gas Transmission in Chester County o Eastern Shore Natural Gas in Chester County 19

20. Click to edit Master title style Click to edit Master text styles o Second level The Benefits Jobs – Need we say more? o Project Development, Design, Engineering, Construction, Operation, and more Enhancing connectivity between growing demand markets and developing supply regions Using plentiful Marcellus Shale gas to help gain energy independence 20

21. Click to edit Master title style Click to edit Master text styles o Second level Contact and More Information Commonwealth Pipeline c/o: Inergy Midstream, L.P. Attn: David Hooker Two Brush Creek Blvd, Suite 200 Kansas City, MO 64112 dhooker@cwpipeline.com http://www.commonwealthpipeline.com