Natural Gas Aggregation andMarketing Programs

Brooke E. Leslie, Senior Counsel, NiSource Inc.

January 14, 2014

Taking Control of Your Energy Supply

• Several options are available when it comes to purchasing your natural gas supply.

• Depending on the volume used and customer class, customers may be eligible for:

– Traditional sales service,– CHOICE service,– Transportation service, or– Aggregation service.

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Natural Gas Supply Options

• Types of Traditional Sales Service– Small General Service (SGS) < 300 Mcf/yr.– General Service (GS) > 300 Mcf between September1 and August 31– Large General Services (LGS) 18,000 Mcf during one of the two most recent

Annual Periods (Nov. through Oct. billing cycles)

• Who supplies the gas?– SCO– CHOICE supplier

Traditional Sales Service

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Traditional Sales Service

• Standard Choice Offer• Columbia will no longer purchase the natural gas for its sales customers

• Auction process in place for those who have not chosen to participate in a CHOICE program

• Supplier will be assigned to the customer and price set by a competitive auction

• CHOICE– Customer chooses a natural gas supplier

– Customer enters into an agreement with the supplier or marketer

– Will still be billed by Columbia for the transportation of the natural gas and costs associated with the service

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CHOICE Program Overview

• History– Began in 1997 in the Toledo area

– Officially expanded to the entire state in 1999

– Evolution of the program a result of a collaborative effort

• Eligibility– Customers using less than 2,000 Mcf/year

– Can not be in arrears

– Can not be a PIPP customer

• Marketers– Must be certified by the Commission

– Must provide firm service

– Must abide by Columbia’s Code of Conduct

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Natural Gas Supply Options

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Transportation Service

• Overview

− a Transportation Service Customer is a non-residential class customer account provided gas service under Columbia’s Small General Transportation Service, General Transportation Service, or Large General Transportation Service Rate Schedule.

− Customer is responsible for procuring its own natural gas supply for delivery under Columbia’s tariff.

− Similar to CHOICE, but available to commercial and industrial customers.

Transportation Service

• Service Agreements shall set forth:− the points of receipt at which Columbia will accept delivery of

Customer’s gas;

− the points at which Columbia will redeliver gas to Customer’s facilities;

− the customer’s Maximum Daily Quantity and Annual Transportation Volume;

− daily meter reading service election; and

− the specific services and levels of such services for which customer has contracted.

• Other Requirements as Set forth in Columbia’s Tariff− Conditions of Service

− Daily Measuring Device

− Internet-Based Website

− Creditworthiness Evaluation

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Natural Gas Supply Options

• What is Aggregation Service?– A service for Agents that have been engaged by Customers receiving

Transportation Service from Columbia to be responsible for the delivery of natural gas to the Company’s city gates on behalf of Customers

• What is an Aggregation Pool?– The customer group that an Agent establishes for the purpose of procuring and

delivering natural gas to Columbia’s city gates.– Customers in the Aggregation pool must be located within the same Pipeline

Scheduling Point.

• Why Aggregate?– May increase purchasing power and procure a better deal for the Customer than

if purchasing natural gas on its own.

Aggregation Service

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Aggregation Service

• Commercial Industrial Customers• Large Commercial and Industrial customers (GTS) have been able to buy as a

group, whether as a consortium or aggregation pool, since the late 1980’s.

• Bound by Columbia tariffs.

• Agent must execute an Aggregation Service Agreement.

• Small Commercial and Residential• Governmental Aggregation has been available since 2001.

• Opt-in v. Opt-out Governmental Aggregation• http://www.puco.ohio.gov/puco/index.cfm/consumer-information/consumer-topics/governmental-energ

y-aggregation-local-community-buying-power/

• http://www.puco.ohio.gov/pucogis/agg/gas.cfm

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Natural Gas Supply Options

QUESTIONS????

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