Steve Baker

President

Natural Gas in Ontario’s Energy Mix Seeing The Bigger Picture

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Union Gas – A Spectra Energy Company

Robust natural gas infrastructure

Industry Economic Contributions

• Total Ontario natural gas customers = 3.4 million

• Ontario natural gas utilities employment = 4,300

• Canadian natural gas sector employment = 172,000 (Canada 2010)

• Ontario capital investment = $750 million to $1 billion annually

• Taxes paid by Ontario gas utilities = $298 million in 2011 (Municipal, Prov., Fed.)

Waterloo/Brantford District

Distribution Area: From Port Rowan, in the south, to Wiarton in the north.Pipelines: 8,400 kilometresCustomers: 263,350Property Tax Paid: $10.6M in 2012District Offices: Waterloo, Guelph, Cambridge, Brantford, Simcoe, Hanover, Owen SoundUnion Gas Employees: Waterloo/Brantford District – 143Brantford Call Centre – 127

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Ontario’s Primary Energy Mix

Natural gas: a critical fuel for Ontario

(TJ/%)

Natural Gas77571132%

Total Coal156221%

Total refined petroleum products99461441%

Coke oven gas219331% Coke

758153% Steam

31200%

Primary electricity, hydro and nuclear47198720%

Gas plant natural gas liquids (NGL's)407982%

Natural Gas77571132%

ResidentialPercentage of customers: 92%

Annual throughput: 34%

Power Generation Plants: 59% (2/3 of Industrial Consumption)

IndustrialPercentage of customers: 1%

Annual throughput: 45%

CommercialPercentage of customers: 7%

Annual throughput: 21%

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Ontario Power Mix 2012

Natural gas: a key contributor to energy mix

Hydro22%

Natural Gas15%

Nuclear56%

Wind3%

Coal3% Other

1%

Generation by Fuel Type

Nuclear36.2%

Natural Gas27.9%

Coal9.2%

Hydro22.2%

Wind4.2

Other0.3%

Installed Capacity

Electricity Generation from Neighbouring States

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Natural Gas Meeting Peak Day Demand

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Ontario’s Electricity Rates & Surrounding Provinces/States

Ontario’s electricity rates must be competitive

(Based on average residential and industrial consumptionHOEP + global adjustment)

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As energy costs escalate, natural gas remains affordable

Ontario’s Total Residential Bill Prices

(“Ontario Average Electricity” is the average price of all electricity distributors across Ontario as reported by Statistics Canada; HST and Ontario Clean Energy Benefit are not included)

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Natural Gas - Conservation Success

Union Gas conservation programs saved customers $1.4 billion in costs (2007-2011)

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North American Market Dynamics

Western CanadaDecline

2-3 PJ/d

Marcellus/ Utica

Growth8 PJ/d

Gulf Coast

Growth1-2 PJ/d

MidcontinentGrowth1-2 PJ/d

BC Growth

Ontario’s robust infrastructure has a competitive advantage

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Diversifying Ontario’s Natural Gas & Infrastructure Supply

New proposed infrastructure will move more supply to Ontario

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Opportunities for Ontario

• Natural gas prices in Canada have been on a steady decline since mid-2008 due to increasing supply and economic trends

• Residential savings of $275-$400/year due to new shale supplies

• Commercial customer savings of $9,000-$15,000/year

• Industrial customer savings of $10-20 million/year

• $3-5 billion/year in savings to Ontario consumers

Connecting New Communities – rural & remote

Opportunities for Ontario

Power Generation – greater role in fuel mix

Natural Gas for Transportation – heavy duty return-to-base vehicles

Industrial – retain and attract energy intensive industry(steel/petrochemical/fertilizer)

Northern Ontario – mining opportunities

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How Energy Industry, Government and Regulators Can Help

• Get the word out about opportunities

related to natural gas

• Create efficiency

& certainty around energy policy

& regulation

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Thank you

Natural Gas in Ontario’s Energy Mix – Seeing The Bigger Picture

www.uniongas.com www.cleanandaffordable.ca