1. Contact Information Sarah Smith Manager, Marketing & Energy Efficiency Terasen Gas Inc. Tel: 604-592-7528 E-mail: sarah.smith2@terasengas.com www.terasengas.com ENERGY STAR ® for New Construction May 5, 2006

2. May 4, 2006 Presentation Outline Introduction Market Conditions in B.C. New Construction Program New Home Program Conclusions Agenda

3. May 4, 2006 Introduction Terasen Gas Inc. wholly-owned subsidiary of Kinder Morgan 900,000 customers 48,000 km of pipeline 125 communities

4. May 4, 2006 Market Conditions In British Columbia: Low Electric Prices: 6¢/kwh Electricity at margin > 6¢/kwh Hot housing market – low cost As a result: Electric Hot Water Tanks are ~50% of market Electric Baseboards common in multi-family Electric Heat 70% of market on Vancouver Island

5. May 4, 2006 Residential Energy Use Profile Source: Natural Resources Canada Website: 2003 B.C. Stats Space Heating 50% Hot Water 28% Appliances 16 % Lighting 5% Cooling 1%

6. May 4, 2006 ENERGY STAR New Construction Target: 3000 New Homes Offer: $500 for builders to install ENERGY STAR heating with natural gas hot water (~covers incremental cost) Partners: MEMPR, NRCan Includes: PST Exemption End Date: Dec 31, 2006

7. May 4, 2006 Program Overview - Process Original program ran until December 31, 2005 to pre-qualify Builders / Developers then had 12 months after approval to install natural gas equipment Extended to Dec 31, 2006 to apply and install

8. May 4, 2006 ENERGY STAR New Construction Marketing: Direct promotion with builders Workshops and Training Breakfast/Lunch info sessions Radio Ads Literature –Industry newsletter –Builder / Developer Toolkit –Information Sheets –Builder / developer-specific website section

9. May 4, 2006 Observations about Builders: like to do things the same way each time (disadvantage & advantage) lean towards granite countertops over energy efficiency quick to follow trends of market prefer one simple application form are not interested in small incentive $ are not interested in complex application process or short programs respond best to direct promotion prefer bundled offers ENERGY STAR New Construction

10. May 4, 2006 Evolution of Program Introducing the New Home Program for Builders and Developers $3000 for EGH80 and Appliances promotes EGH80 homes brings together many existing incentives & offers provides a single application form gets attention of builders long term offer (with increased $ initially) provides specific incentive for appliances and lighting

11. May 4, 2006 Additional Success Factors Keys to success Support initiatives with Education & Awareness Include training of industry Leverage partner programs and funding Provide consistent, longer-running programs

12. Contact Information Sarah Smith Manager, Marketing & Energy Efficiency Terasen Gas Inc. Tel: 604-592-7528 E-mail: sarah.smith2@terasengas.com www.terasengas.com Questions?