1. Natural Gas Fuel Oil Electricity NARUC November 2007

2. 1 NARUC John B. Hess Chair John B. Hess Chairman of the Board & Chief Executive Officer “As an industry leader, we believe an educated customer adds value to the strength of our services.” Introduction

3. 2 NARUC Hess Oil founded in 1933 by Leon Hess; merged with Amerada in 1968 Built on a commitment to customer service Grown to be a leading independent energy company Fortune™ 100, fully integrated energy company: –Exploration, production, refining, retail gasoline, and Commercial & Industrial energy marketing Hess is a leader in producing, refining and marketing energy.

4. 3 NARUC Geographic Focus Hess is a regional total energy supplier. Pittsburgh Charlotte Baltimore Syracuse Woodbridge Providence Oil OnlyGas OnlyGas + OilGas + Oil + Electricity  Oil 15 States  Gas 15 States  Electricity 10 States Gas + Electricity

5. 4 NARUC Hess Organization Marketing and refining has four major business lines… Leading energy supplier to commercial, industrial, and wholesale customers East Coast and Ohio Valley geographies Significant presence in natural gas, fuel oil, and electricity Retail Sales & Marketing Supply & Terminals Energy Marketing Over 1,350 locations Leading independent convenience retail marketer on the East Coast Set standards for quality, service and cleanliness Optimizes East Coast storage assets to supply petroleum products through 22 terminals Markets crude production Can handle new Ultra Low Sulfur Diesel Tank Picture Refining St. Croix, USVI refinery, jointly owned with Petroleos de Venezuela Port Reading, NJ refinery supplies Eastern US markets

6. 5 NARUC Hess – Electricity Market Area N. Y. S. Electric and Gas National Grid Consolidated Edison Co. Orange and Rockland Rochester Gas and Electric Central Hudson Gas & Electric New York Delmarva Power & Light Delaware United Illuminating Connecticut Light & Power/ Northeast Utilities Connecticut Rhode Island Narangaset Electric Co. / National Grid Baltimore Gas and Electric Allegheny Power Maryland Delmarva Power & Light Pepco Duquesne Light Co. Penelec (First Energy) PECO Energy/ Exelon Pennsylvania Allegheny Power UGI Wellsboro Electric Penn Power Pennsylvania Power & Light Public Service Electric and Gas Jersey Central Power and Light Rockland Electric Co. New Jersey Atlantic Electric Maine Central Maine Power Bangor Hydro-Electric District of Columbia Pepco Public Service of New Hampshire/ Northeast Utilities New Hampshire Granite State / National Grid Fitchburg Gas & Electric/ Unitil Massachusetts Massachusetts Electric, Nantucket Electric/ National Grid Boston Edison, Cambridge, Commonwealth/ NSTAR Municipal Electric Departments Western Massachusetts Electric/ Northeast Utilities Hess focuses its C&I business in 36 core EDC markets.

7. 6 NARUC Hess Natural Gas Market Area Hess focuses its C&I business in 54 core LDC markets. Columbia Gas of Ohio Overlap Ohio Hope Gas Allegheny Energy Overlap West Virginia UGI Utilities Columbia Gas of PA PP&L/Penn Fuel Gas Dominion-Peoples Equitable Gas Overlap Pennsylvania PECO BG&E CONECTIV Washington Gas Light Columbia Gas of VA North Carolina Piedmont Rhode Island Providence Gas Co. Valley Gas Co (New England Gas) Connecticut Yankee Gas Services Co. Southern Connecticut Gas Connecticut Natural Gas Corp Corning Natural Gas Co. Central Hudson Gas & Elect. Corp. Niagara Mohawk Corporation NY State Electric and Gas Corp. Rochester Gas and Electric Corp. New York Keyspan Energy Delivery NY Consolidated Edison Co. of NY, Inc. Orange & Rockland Utilities Elizabethtown Gas Company New Jersey Natural Gas Co. South Jersey Gas New Jersey PSE&G Keyspan Energy Delivery Long Island New Hampshire Keyspan Energy Delivery NH Massachusetts Boston Gas Co. (Keyspan) Colonial Gas (Keyspan) Baystate State Gas Co. Commonwealth Nstar Berkshire Gas Fall River Dominion East Ohio Gas Cincinnati Gas & Electric Northeast Ohio PGW NCNG PSNC PG Energy Valley Cities Northern Utilities NH Maine Northern Utilities Maine Maine Natural Gas Overlap Delaware Maryland Washington Gas Light Virginia South Carolina Piedmont SCANA

8. 7 NARUC Natural Gas Supply Assets We have built a strong supply network that often creates optimization opportunities…  1.05 Bcf/d Pipeline Capacity  19 Bcf Natural Gas Storage Supply from Eastern Canada Supply from Atlantic Canada Supply from Gulf of Mexico LNG Supply from Midwest  Diverse Supply Sources

9. 8 NARUC Hess serves about 22,000 Commercial and Industrial (C&I) natural gas customers throughout the Eastern US. Hess is one of the largest Natural Gas Marketers in the Eastern US, and is dedicated to continued growth and customer service. Hess is the largest C&I market share by volume among Natural Gas Marketers in New York, New Jersey, Ohio, Massachusetts and Rhode Island. Natural Gas Business

10. 9 NARUC How it works DEO replaced its gas cost recovery mechanism with a standard service offer All customers who had not switched to DEO’s choice program are eligible DEO buys gas for their customers from suppliers The price of gas is passed on to customers at SSO rate DEO continues to deliver gas to all customers, offers payment plans and handles all emergency and customer service calls Dominion East Ohio SSO Service

11. 10 NARUC How the SSO rate was determined A descending clock auction was held August 29, 2006. Bids were received from 12 wholesale suppliers based on fixed adjustments to the NYMEX settlement price SSO rate changes monthly and DEO does not earn a profit on the gas it sells to customers, the purchased cost is passed on dollar for dollar directly to customers

12. 11 NARUC Positives for participants DEO DEO is able to exit the merchant function and is no longer subject to reviews for gas cost PUCO No longer have to regulate gas costs Reliability is maintained because the utility remains in control of distribution, system operations and planning for future added load Percentage of Income Payment Plan (PIPP) customers are guaranteed the same low price as the SSO customers

13. 12 NARUC Positives for participants Customers All customers have the benefit of competition without having to shop The customers are able to maintain their relationship with the utility The customers have PUCO protection Customers are assured the cheapest rates SSO customer can still switch to choice at any time The auction creates an easily determined comparable shopping rate An educated customer is needed for choice to work and some customers aren’t willing to spend the time to do the research

14. 13 NARUC Evolution of SSO In the future we can change the way the price is derived Incentive for continued product development