Kinder Morgan, Inc. · NYSE:KMI
Kinder Morgan — 2006 Analyst Conference
19 slides from Kinder Morgan's conference presentation, Jan 24, 2006
Slide 1: Terasen Gas
Terasen Gas R.L. (Randy) Jespersen – President
Slide 2: Overview
Overview Dimensions Our Opportunity Operational Excellence Key Initiatives ROE & Capital Structure Focused Growth Conclusion
Slide 3: Terasen Gas Segment – Dimensions
Terasen Gas Segment – Dimensions 892K customers Serve 95% of BC customers 27K miles of pipeline Third largest gas utility in Canada Largest natural gas utility in Whistler the Pacific Northwest C$2.9B rate base C$275M EBIT (2005)
Slide 4: Our Opportunity
Our Opportunity Strong natural gas distribution franchise in a unique region Electric/gas rate compression Challenging opportunity Leadership position to develop new gas infrastructure for regional needs Well positioned for consolidation opportunities
Slide 5: Our Opportunity
Our Opportunity Westcoast (Duke) Terasen Gas BC System Pacific Northwest I-5 (TCPL) Corridor is unique Market area is I-5 Corridor Market Area geographically Jackson Prairie separated from the Storage rest of North America Mist Northwest Storage Pipeline Region is served by several (Williams) differ
Slide 6: Gas/Electric Competitiveness as at January 2006
Gas/Electric Competitiveness as at January 2006 Electric $2,500 Gas $2,000 CAD $ / year $1,500 $1,000 $500 $0 Seattle Portland Vancouver Customer Growth Customer Growth Customer Growth 2 to 3% / year 3 to 4% / year 1 to 2% / year
Slide 7: Gas/Electric Competitiveness
Gas/Electric Competitiveness Electricity Supply/Demand in B.C. Electric rates 5,500 move towards 4,500 market Expansion of gas MW 3,500 infrastructure 2,500 1,500 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Heritage Hydro & Existing Purchases C
Slide 8: Regional Supply/Demand - Expansions Required
Regional Supply/Demand - Expansions Required
Slide 9: Operational Excellence – Asset Management
Operational Excellence – Asset Management Four areas of focus: Natural Gas Distribution Safety Cost Terasen Other TGVI Distribution Gas Cos. Service quality Environmental responsibility Credibility with regulators, customers and stakeholders Cost management drives efficiency for the benefit of custo
Slide 10: Operational Excellence – Asset Management
Operational Excellence – Asset Management A leader in operating efficiency O&M Per Customer Customers Per Employee Net Plant Investment Per Customer 700 * ($) 600 600 ($) 7000 High Terasen 500 High 5000 400 400 Average 3000 Terasen 300 Average Average * Terasen Low 200 * 200 1000 100 – – Source: LSM
Slide 11: Operational Excellence - Regulation
Operational Excellence - Regulation Long history of negotiating and renewing incentive regulatory settlements Terasen Gas and TGVI settlements in place Four year term from 2004-2007 for Terasen Gas Vancouver Island extended to December 2007 Deferral accounts for Terasen Gas: • Cost of gas, consumpti
Slide 12: Key Initiatives: 2006 Allowed ROE & Capital Structure
Key Initiatives: 2006 Allowed ROE & Capital Structure 10.00% Union Gas (1998/2004) 9.60% 9.20% 2006 Allowed ROE Gaz Metro (1999/2004) Duke (1994/2004) TCPL (2004) 8.80% Atco Gas (2004) Enbridge Gas * (1998/2004) 8.40% Terasen Gas * (1994/1999) 8.00% 7.60% 30% 32% 34% 36% 38% 40% 42% Equity Component
Slide 13: Key Initiatives – Focused Growth
Key Initiatives – Focused Growth !"#" ! () * ! "++% ! ! ( ! "#$$% &'
Slide 14: Growth - One Million Customers by 2010
Growth - One Million Customers by 2010 Terasen Gas Net Customer Additions 1,050,000 40,000 1,000,000 1,000,000 35,000 950,000 Year-Ending Net Customers Annual Customer Adds / 900,000 30,000 Housing Starts 850,000 25,000 892,133 800,000 20,000 750,000 700,000 15,000 650,000 10,000 600,000 5,000 550,0
Slide 15: Growth – Whistler
Growth – Whistler $ % & ' , - * (( ' ( )** % %
Slide 16: Growth – LNG Storage
Growth – LNG Storage % Whistler ' + +, Squamish )#"" , ' $ Nanimo Vancouver CANADA ' USA VANCOUVER - ISLAND % Victoria '
Slide 17: Growth – Inland Pacific Connector
Growth – Inland Pacific Connector .& + / 0 .1 + + + 2 ' 1 Potential C$300 to C$500 Million gas transmission line 0 * connecting SCP to the Lower 1 . Mainland and Sumas (NWPL) . / Project will require support from multiple shippers to move forward Increasing tolls on Duke System improving competitive
Slide 18: Conclusion
Conclusion Strong, stable cash flow provides solid financial base for growth opportunities Strong asset management and stakeholder relations skills Several opportunities to invest in new gas infrastructure Well positioned for consolidation opportunities
Slide 19: Kinder Morgan Terasen Gas
KINDER’ MORGAN --) Terasen Gas