SCOG 2007 Natural Gas Opt-In Program

Prepared by: Mark R. Burns, PresidentIndependent Energy Consultants, Inc.July 30, 2007

SCOG Program Process & Timeline

1. SCOG representative notify Integrys that SCOG has retained IECa) Joe Martuccio made call 7/27

2. Request current SCOG information from Exelon and Integrys. Also requested current contracts not be renewed.a) Mark Burns made calls 7/24. Need confirmation from Exelon.b) Need contract information (account #, service & billing addresses,

etc.)c) Need most recent 12-months usage informationd) Obtaining this from suppliers will greatly minimize member’s work

3. Send SCOG Invitation Letter to Member Communities - 7/30a) Draft provided to Joe Martucciob) Letter should be emailed or faxed for the sake of timec) New accounts – Members fax bills to Mark Burns - 8/3 d) All Members - Signed Letter of Intent faxed back to Mark Burns -

8/17e) Provide Mark Burns with latest SCOG Member contact information

4. SCOG Representative Sign IEC Consulting Contract – 7/31

Process & Timeline - Cont.

5. Finalize RFP 8/1

6. Obtain, and analyze group load data 8/6

7. Issue RFP with load data file to eligible suppliers 8/7

8. Respond to supplier questions and bids received 8/20

9. Bids analyzed and recommendation prepared for SCOG 8/21

10.Supplier(s) selected and firm price struck 8/22 - for at least October

11.Contracts completed and accounts enrolled by winning bidder

a) IEC prepare contracts to extent possible & hand deliver with instructions

b) Members overnight mail contracts to supplier

c) COH account enrollment deadlines GTS - 8/31, Choice - 9/14

d) DEO account enrollment deadlines GTS – 9/14 Choice - 9/10 noon

Our Energy Procurement Services

NeedsPlanning

MarketAnalysis

Auction or

Paper RFP

ContractOngoingSupport

• Discuss Goals and Risk Tolerance

• Review current market conditions

• Identify Locations

• Request and Format 12 months historical usage

• Perform Price-to-Compare Analysis

• Identify Contract Parameters

• Structure RFP

• Alert 100% of registered supply base

• Run reverse auction

• Upload contracts, sites and usage

• Prepare for Renewals

Proven Process Ensures Success and Supports Compliance

• Perform Savings Analysis

• Recommend Contracting Terms

• Review and finalize contract

Life of Contract

Natural Gas Price - Trend Drivers

Variable (Price code: red=up, green=down, yellow=na)

Short Term

(30 – 90 days)

Medium Term

(3 – 12 mos.)

Long Term

(1-5 years)

N.G. Storage

N. G. Rig Count

N.G. Rig Output

Hurricane Forecast

U.S. Public Policy

Geo-Political (crude & N.G.)

Weather (temperatures)

Liquefied Natural Gas Production

N.G. Demand (electric, ethanol)

N.G. Imports

Technical Indicators

Short-term Weather Forecast

12 vs. 24-Month Strip of Natural Gas Prices

Market is trading Contango – shorter term deals more attractive than longer terms

October 2007 NYMEX Future’s Contract

NGV7 - NATURAL GAS October 2007 (NYMEX) [Real time Prices]

Date Open High Low Last Change

07/27/07 6.298 6.517 6.255 6.436 +0.145

•Short Term Indicators Average: 60% - Sell

•Medium Term Indicators Average: 75% - Sell

•Long Term Indicators Average: 100% - Sell

•Overall Average: 80% - Sell

Price Support Resistance

$6.436 $6.141 $6.665

RFP Construction

• Price Offers Sought– Fixed Price– Variable Price with option to fix price for

any remaining month(s)• This allows winter fixed,

summer variable if desired– Ability to hedge portions of the load at

multiple times

• Terms Sought– 1 year and 2 year periods– 2 year term could have separate pricing structure and/or time

period in which to strike price

• Supply Requirements– Firm supply– Contract quantity only, +/- 10% swing, Full Requirements

Stark Council of Governments Request for Proposal

For the Supply of Natural Gas Services

RFP Construction – Cont.

• Expect separate pricing and possibly separate suppliers– Choice Accounts = Full Requirements

• Burner Tip pricing $/Mcf DEO; $/Ccf COH– GTS Accounts = Swing volume or Full Requirements TBD

• City Gate pricing $/Dth with utility conversion to $/Mcf– DEO and COH prices will differ

• Any Supplier or Sales Representatives to disqualify?

• Summary billing desired? Payment terms desired?

• Early termination fee limits?

• IEC discretion on pre-qualifying well known registered suppliers

• Administrative fee of $0.05/Mcf

• Any other value added service desired from suppliers?

• Any negotiating points to offer to suppliers? Right to match best offer?

Stark Council of Governments Request for Proposal

For the Supply of Natural Gas Services

List of Potential Suppliers

• Amerada Hess*

• Commerce Energy

• Compass Energy

• Direct Energy*

• Dominion East Ohio Energy*

• ECONnergy Energy

• Exelon Energy*

• GasMark

• Integrys Energy*

• IGS Energy*

• Lakeshore Energy

• Metromedia Energy

• MxEnergy*

• Soar Energy

• Vectren Source*

• Volunteer Energy*

* Very familiar with company

Program Administrative Issues

• SCOG Point of Contact for Independent Energy Consultants?– Anyone needing or desiring to be cc’d on correspondence?

• SCOG Point of Contact for SCOG Members?

• SCOG Decision Committee? (Joe Martuccio, Julie Herr, Craig Chessler)

• Independent Energy Consultants Contact Information:Mark BurnsPH: 330-995-2675FAX: 216-274-9176mburns@naturalgas-electric.com

• Questions?

• Recap of Action Items