1. CEC Workshop January 24, 2003 January 24, 2003 Chris Price Market Development Wild Goose Storage Inc.

2. North American Storage Capacity FERC Utility (2,128 Bcf) Independent (559 Bcf) State Utility (1,704 Bcf) 4.4 Tcf Working Gas Volume

3. California Storage Infrastructure Current April, 2004 Wild Goose PGE Lodi SoCal Total Wild Goose PGE Total Inventory Bcf14.0 40.5* 12.0 119.6 186.1 29.0 47.0* 207.6 Max. Injection80 315 400 803 1,598 450 315 1,968 MMcf/d Max. Withdrawal200 1,361 500 3,125 5,186 700 1,361 5,686 MMcf/d * Proposed inventory expansion of 6.5 Bcf in 2004

4. ä Market Area Storage ä Optimizes transportation from supply area ä Reduces peak transportation capacity required ä Improves efficiency of transportation usage ä Insurance function: supply reliability and price stability for demand peaks ä Optimize purchased volumes and sales prices ä OFO and EFO Protection ä Provides an operational tool for balancing supply with demand Gas Storage

5. Storage Value Pyramid Optimization Operational Reliability Intermonth Arbitrage Intramonth Arbitrage OFO/EFO Insurance Intrastate Transportation Management Interstate Transport Management Seasonal Price Arbitrage Every Company is Different The Benefits of Storage

6. Pipeline Enhancement Example 2.5 Bcf Inventory 50,000 Dth/d Injection and Withdrawal 3.65 cycle $1.56/Dth Demand (100% Rack Rate) $5,360,000 Total incl. variable and fuel Supply With Storage $0.95 Contract 100,000 Dth/d pipeline capacity $29,200,000/year Fixed Cost 100% LF $5,360,000/year total storage cost $34,560,000 Total annual cost $0.95/Dth Overall Cost Save $9,240,000 or $0.25/Dth each year Demand Peak Market 150,000 Dth/d Average Market 100,000 Dth/d Minimum Market 50,000 Dth/d Storage Without Storage $1.20 150,000 Dth/d pipeline capacity $43,800,000/year fixed cost 67% LF $1.20/Dth Overall Cost Pipeline Fixed Toll = $0.80/Dth

7. Get the right kind of storage to match your business Storage customers Number of Cycles $/mcf WGV Storage costGas Storage Economics: Storage Development Costs higher cycling = higher cost costs increase exponentially at high cycling rates Storage Value (to customer) higher cycling = higher value diminishing returns from higher cycling rates best value proposition depends on your needs Value