Converting To Natural Gas Trends and Case Studies. Robert Stoyko, Vice President Marketing and Customer Relations UGI Utilities, Inc.

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1 Converting To Natural Gas Trends and Case Studies Robert Stoyko, Vice President Marketing and Customer Relations UGI Utilities, Inc.

2 What Will We Cover Today An Introduction to UGI Why Should Homes/Businesses Switch to Natural Gas? UGI s Growth Results and New Expansion Initiatives Successful Local Projects 1

3 Introduction To UGI

4 Our Service Territory 3

5 UGI Is A Leading Gas Utility In PA Total Gas Customers 613,000 UGI Penn Natural Gas 166,000 UGI Central Penn Gas 81,000 UGI Gas 366,000 Total UGI Electric Customers 62,000 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 4

Industrial/Commercial Total Annual Gas Sales: ~ 154 BCF (billion cubic feet) Total Annual

6 Why Switch To Natural Gas?

7 Conversion Economics Unique Situation o Oil prices remain high o Gas prices are near historic lows o Gas is an American/Pennsylvania fuel Economics o Oil prices this past winter $3 to $4 per gallon (eq $21 to $29 per Mcf) o Natural gas prices (commodity & distribution) $8 to $11 per mcf 6

Economics o Oil prices this past winter $3 to $4 per gallon (eq $21 to

8 Your Utility Contact Is Important overify Infrastructure at the site Is existing utility infrastructure available to support the expected natural gas load? oreview rate options ocost Savings Analysis owork with Consulting Engineers and HVAC Contractor to coordinate service installation 7

9 Get A Personalized Estimate Using Our Fuel Cost Comparison Calculator 8

Tools For Businesses Fuel Cost Comparison Calculator o Compare fuel costs for your business www.ugi.

10 Tools For Businesses Fuel Cost Comparison Calculator o Compare fuel costs for your business Check for Natural Gas Availability o Find out if natural gas is available to your business Business Energy Advisor o Get energy savings advice specific to your industry and type of use Our Blog, UGI Connection o Read real life examples from other businesses who have made the switch 9

ugi.com/gasavailability Business Energy Advisor o Get energy savings advice specific to your industry and type of use

11 Growth Results and New Initiatives

12 Natural Gas Conversion Statistics Converted government facilities and schools to clean-burning gas within the last five years ~ 15 government facilities ~ 20 schools Nine UGI customers installed combined heat and power systems within the last five years Carbon savings of nearly 72,000 tons of CO2 Since 2008 UGI converted over 45,000 households and 45 large C&I facilities, and invested over $40 million annually to extend service to new customers In 2014, the 45,000 households that converted to natural gas will save approximately $70,000,000!!! Overall carbon savings equivalent to removing 45,000 cars from the road 11

UGI converted over 45,000 households and 45 large C&I facilities, and invested over $40 million annually to extend service to new customers In 2014, the

13 Customer Additions Growth Trend (Fct) 2015 (Bud) New Homes Residential Conversions Residential Upgrades Commercial 12

2012 2013 2014 (Fct) 2015 (Bud) New Homes

GET Gas Program The UGI Growth Extension Tariff(GET) is designed to provide natural gas service to Unserved or Underserved area Available as a 5-year pilot to customers of UGI Utilities GET

14 GET Gas Program The UGI Growth Extension Tariff(GET) is designed to provide natural gas service to Unserved or Underserved area Available as a 5-year pilot to customers of UGI Utilities GET Gas customers will pay a monthly surcharge over a 10-year-period to cover the cost of the main extension UGI designated $75 million for the approved pilot program Visit 13

Utilities GET Gas customers will pay a monthly surcharge over a 10-year-period to cover the

15 GET Gas Program Program Rollout began in September 2014 GET Underserved Leads: ~ 2,055 (All Companies without Promoting Program) 60% of Leads are Prequalified for GET Forecasted approximately 33,000 Parcels $120M+ Estimated Project Cost GET Unserved Communities: ~ 68 Unserved Communities 19,873 Parcels Estimated Cost Exceeding $98M 14

GET Forecasted approximately 33,000 Parcels $120M+ Estimated Project Cost GET

16 Forecasted Underserved and Unserved Lead Saturation Demand $180 $171 $160 $140 M i l l i o n $120 $100 $80 $60 $40 $31 $44 BUDGET FORECAST $20 $- UGI PNG CPG Company Note: Forecast are estimated and are not equally distributed between Unserved and Underserved 15

FORECAST $20 $- UGI PNG CPG Company Note: Forecast are estimated

17 Successful Local Projects

18 Fort Indiantown Gap Located in Annville, Lebanon County, Fort Indiantown Gap is the primary training site for the Pennsylvania National Guard The site offers more than 17,000 acres and 140 state-of-the-art training Project Type: Oil/Propane to Natural Gas Conversion o Initial evaluation over 10 years ago / Project started in 2010 and is ongoing Project Highlights: o More than 80,000 feet of HDPE main installed to date o More than 300 services to existing and new buildings installed to date Results: o About 1/3 reduction in energy cost o Replaced the use of more than 1.2 million gallons of oil with natural gas 17

/ Project started in 2010 and is ongoing Project Highlights: o More than 80,000 feet of HDPE main installed to date o More than 300 services to existing

19 Panelist: Fort Indiantown Gap 18

Shady Maple The Shady Maple Complex is located in East Earl Township Project Type: Propane to Natural Gas Conversion o Initial evaluation over 15 years ago o Project completed August 29, 2012 Project

20 Shady Maple The Shady Maple Complex is located in East Earl Township Project Type: Propane to Natural Gas Conversion o Initial evaluation over 15 years ago o Project completed August 29, 2012 Project Highlights: o UGI Established a New Take Station with Columbia Transmission Results: 1,200 Feet of 8 Inch HDPE Installed o Prior to August 2012, Shady Maple burned approximately 280,000 gallons of propane o UGI served Shady Maple Maintenance Garage in 2013 and Shady Maple RV Center in

Station with Columbia Transmission Results: 1,200 Feet of 8 Inch HDPE Installed o Prior to August 2012, Shady Maple burned

21 Shady Maple Map Blue Ball Elementary Shady Maple Farm Market Shady Maple Maintenance Garage Shady Maple Smorgasbord Shady Maple RV Center East Earl Township New UGI Take Station 20

22 Altadis USA Altadis USA produces tobacco sheets for several cigar brands and produces sheet materials for food and laundry applications. Project Type: Oil to Natural Gas Conversion o Consumed over 1.4 million gallons of #6 oil annually Project Highlights: o Over 4 miles of gas main installed to serve residential and commercial customers in the area o Private ROW s acquired Results: Consumes over 250,000 Mcf in natural gas annually 21

23 Altadis USA 22

24 GEO Specialty Chemicals Oil/Propane to Natural Gas Conversion o Initial evaluation over 10 years ago o December 2010 completion Manufacturer of over 300 specialty chemicals for niche markets A total of 11,582 of 8 PE main installed Resultant 25% reduction in emissions o Approximately 250 fewer fuel oil trucks and 50 fewer propane trucks traveling on Cedar Crest Boulevard 23

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26 Questions? 25

Heating Oil Conservation and Fuel Switching

Heating Oil Conservation and Fuel Switching Summary: Demand Side Management for Heating Oil Demand side management (DSM) is the modification of consumer demand for energy through various methods such as