Heat Smart. Natural Gas is smart for Connecticut 10/5/2015. A UIL Holdings Company. a diversified energy delivery company

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1 Heat Smart. Natural Gas is smart for Connecticut A UIL Holdings Company a diversified energy delivery company Service Area Key UI SCG CNG Berkshire Overlapping Territory The United Illuminating Company (UI) Service territory: 335 sq miles ~321,000 customers 17 communities 50% interest in GenConn Energy LLC Southern Connecticut Gas (SCG) Service territory: 512 sq miles from Westport, CT to Old Saybrook, CT ~183,000 customers 2,281 miles of mains with ~133,000 services 24 communities Connecticut Service Natural Area KeyGas UI Umpire SCG CNG (CNG) BGC Service territory: 716 sq miles - Greater Hartford-New Britain & Greenwich ~165,000 customers 2,022 miles of mains with ~126,000 services 22 communities Berkshire Gas Company (Berkshire) Overlapping Territory Service territory: 738 sq miles in Western MA including Pittsfield and North Adams ~37,000 customers 744 miles of mains with ~31,000 services 1

2 CT s Comprehensive Energy Strategy Intended to lower energy costs for residents & businesses Governor Dannel Malloy: Focusing on innovative approaches to energy efficiency cost effective renewable power, smarter building management, and expanded use of low-cost natural gas, we are reducing consumer costs, making the state more competitive, and creating good jobs with good benefits. Press Release, State of Connecticut, Governor Dannel P. Malloy, February 19, 2013 CES and Gas Expansion The CES and LDC Gas Expansion Plans have been very successful in expanding the use of natural gas Changes to the Hurdle Rate Model System Expansion Rates Use of Non-Firm Margin (NFM) Despite the multiple benefits of natural gas, the overwhelming driver of recent conversions has been the price advantage over oil. 2

3 The Economic Advantage of Natural Gas Source: Economic Advantage = Positive Correlation to Customer Acquisition Since February 2014, the retail price of heating oil has dropped by more than $1.75 per gallon, according to data from the state Department of Energy and Environmental Protection 3

4 All assumptions and results contained herein are nonbinding to UIL Holdings Corporation and or its subsidiaries. Actual savings are subject to change based on, among other variables, natural gas and alternative fuel prices and customer equipment performance. This Savings analysis is for customer informational purposes only and does not constitute a quotation or a commitment, representation or w arranty that the forecasted savings w ill be achieved. All commitments, representations and w arranties w ith respect to natural gas services shall be solely as stated in the final Commercial and Industrial Installation Service Agreement. 10/5/2015 Understanding the Customers Needs Listen to the Customer Wait and See dilemma Typical owner wears many hats Competing budget interests Life of current equipment Falling Oil prices Conversion Costs I lease my space I m locked into a contract I didn t know there was a difference Design a solution that meets their needs Fuel Choice Environmentally Clean Convenience Simple Affordable Clean Value Reliable Affordable Incentives help to remove barriers to entry and provide immediate value Customer Feedback Customer Value Leveraging all Available Tools Education & Outreach Layer Programs & Incentives Natural Gas Rate Analysis and Comparison Customer 0 Address 0 Account Rep 0 Date 9/25/2015 Rate PGA Rate* 0 Usage Base Ccf Heat Ccf Cooling Ccf Total Ccf Estimated Consumption and Cost of Estimated cost of alternative fuels per Natural Gas BTU equivilent Average $/Ccf #DIV/0! Fuel Cost Month Ccf Cost #1 Kerosene #DIV/0! /Gal July 0.0 #DIV/0! #2 #DIV/0! /Gal August 0.00 #DIV/0! Propane #DIV/0! /Gal September 0.00 #DIV/0! Gasoline #DIV/0! /Gal October 0.00 #DIV/0! Electricity #DIV/0! /Kwh November 0.00 #DIV/0! December 0.00 #DIV/0! Estimated Annual Savings vs Current January 0.00 #DIV/0! Fuel Source February 0.00 #DIV/0! Alternative Fuel March 0.00 #DIV/0! Annual Consumption April 0.00 #DIV/0! Unit Cost May 0.00 #DIV/0! Total Alt. Fuel Cost June 0.00 #DIV/0! Total NG Cost #DIV/0! Total 0 #DIV/0! Annual Savings * PGA Rate is based on the published 12 month average PGA found on CNG and SCG's websites 4

5 East Hampton Natural Gas Expansion A true partnership between CNG and the Town Company Commitment CNG to construct 10 miles of new gas main to a new franchise town Total project cost of more than $6 million dollars Allocation of CES NFM of $1.5 million Fuel choice for over 420 residential and 100 commercial prospects Municipal Commitment East Hampton to convert all town buildings to cleaner, more reliable, and less expensive natural gas $500K Community Contribution Assistance with paving and road restoration Expedited construction permitting East Hampton Natural Gas Expansion 5

6 Natural Gas Consumption Large C&I Medium C&I Small C&I 10/5/2015 American Distilling, East Hampton s Anchor Customer World s largest supplier of witch hazel Major employer and tax payer in East Hampton Burned #4 Fuel Oil = Significant Savings with natural gas Clean burning natural gas supports their eco friendly mantra: Lean, Mean and Green from Day One Removing Barriers to Entry Through Incentives long Sales Cycle Time Why Large Industrial Embraces Natural Gas? Typically owner occupied Corporate sustainability goals Budgeting stability Sophisticated energy management Long Term operations planning Natural gas opens the door for Distributed Generation options, micro turbines and fuel cells, etc. Provides more equipment choices, higher efficiency units, Roof top units, gas driven chillers etc. C&I Incentive Design Considerations Target medium to small customers Provide impactful value $ Short 6

7 Energy Efficiency Fund Background Purpose Provides electric and natural gas efficiency services and incentives to utility customers Funding Primarily by a charge on customer utility bills Administration The state s electric and distribution companies (Eversource, United Illuminating) and gas utilities (Eversource, Connecticut Natural Gas, and Southern Connecticut Gas) Stakeholder Input The Energy Efficiency Board (EEB) advises and assists the utilities in developing and implementing the energy efficiency plans and programs Planning The utilities submit a 3-year Conservation & Load Management Plan to the EEB, and then to DEEP for its review and approval Energy Efficiency = Multiple Benefits Economy Creates Local Jobs Gives Businesses a Competitive Edge Lowers Energy Prices for All Energy System Increases Reliability & Resiliency Reduces Peak Demand Delays or Avoids Need for New Capacity Environment Reduces Air Pollution Reduces Greenhouse Gas Emissions Reduces Water Use 7

8 Energy Efficiency Programs Commercial & Industrial Small Business Energy Advantage Turn-key program for small business owners where approved vendors perform an energy use evaluation,recommend energy saving actions, and install energy saving measures Energy Conscious Blueprint Available for new construction and renovations Energy Opportunities Available for retrofit projects in existing facilities The Lee Company Large C&I Case Study The Westbrook/Essex gas expansion presented The Lee Company s management team with opportunities to improve their overall operating costs and they seized them. Constructing a new, energy efficient facility Implementing an energy management system Upgraded over thirty boilers with high efficiency units at their three campuses in Westbrook and Essex With the reduction in fuel prices the projects would pay for themselves in under three years. With clean burning natural gas, The Lee Company was able to reduce their overall operating costs (delivery costs, service, maintenance and cleaning) Measures: High-efficiency boilers, Energy Management System and Construction of a new efficient facility Fund Incentive: $ 123,775 Energy Savings: 24,785 ccf natural gas/year Cost Savings: $ 27,263 annually Reduced Emissions: SOx- 540 lbs.; NOx- 16,000 lbs. The Energy Conscious Blueprint Program was there to assist with incentives We now spend less time on maintaining our HVAC systems and more time focusing on providing products and solutions to our customers. Leighton Lee IV, Facilities Manager, The Lee Company 8

9 Energy Efficiency = Multiple Benefits 2016 Statewide Energy Efficiency budget of over $240M Conservation programs fund energy solutions for your home, business, and community For More Information Energize Connecticut Website LDC Websites Energize Connecticut Center 120 Universal Drive, North Haven FREE showplace of energy saving ideas 9

10 Thank you. Terri Eller Director Commercial & Industrial Sales 10