Slide 1: Growth Capital & Recovery Mechanisms
Growth Capital & Recovery Mechanisms
Slide 2: UGI Utilities Service Territory
UGI Utilities Service Territory *Larger markets include the following: Allentown, Bethlehem, Easton, Reading, Lancaster, Lebanon, Harrisburg, Hazleton. Approximately 700,000 customers in entire service territory. 2
Slide 3: Investment Creating Value
Investment Creating Value Favorable PA rate making mechanisms reduce regulatory lag… • Fully projected future test year • Distribution System Improvement Charge (“DSIC”) • Nearly 90% of FY17 investment in rates within 12 months Innovative programs driving growth opportunities… • Energy Efficiency &
Slide 4: Fully Projected Future Test Year
Fully Projected Future Test Year • Rate setting mechanism that utilizes forward look to project rate base, operating expenses and revenue • Significantly reduces regulatory lag on capital and expense recovery UGI-Gas Rate Case Example 9/30/15 Historic Test 9/30/2016 Year Future Test Year 1/1/2016 9/
Slide 5: Distribution System Improvement Charge
Distribution System Improvement Charge • Promotes replacement & betterment investment • Surcharge on bill • Currently capped at 5% of distribution cost • Requested cap increase to 10% on PNG & CPG Mar-2016 Nov-2016 Apr-2015 PNG/CPG file for Feb-2012 PUC approves DSIC PNG begins cap increase on DSIC
Slide 6: Energy Efficiency & Conservation Program
Energy Efficiency & Conservation Program • Filed with UGI Gas base rate case • 5-year, $27 million program (FY17 – FY21) • Fully recoverable investment • Energy Efficiency Program provides rebates to new and existing customers incentivizing high-efficiency gas appliance conversions or upgrades • Pre
Slide 7: Technology & Economic Development
Technology & Economic Development • 3-year pilot program • Provides rate flexibility for small- & mid-size C&I customers • Natural gas conversions • Expanding uses (CHP, NGV) • Investment recovered over life of service 7
Slide 8: Growth Extension Tariff
Growth Extension Tariff • Extending service to unserved & underserved • 5-year, $75mm pilot program • Surcharge on bills • Over 35 projects completed or underway 8
Slide 9: Summary of Approach
Summary of Approach • Leverage value of Fully Projected Future Test Year and DSIC in reducing regulatory recovery lag • Continued focus on supporting profitable growth and customer satisfaction though innovative rate offerings such as EE&C, TED and GET Gas • Leverage continued expansion of Pennsylva
Slide 10: LNG Strategy & Asset Portfolio
LNG Strategy & Asset Portfolio
Slide 11: The LNG Business Opportunity
The LNG Business Opportunity UGI Energy Services has been active in the LNG business since 2002, growth has accelerated over the last five years and is expected to continue. New Pipeline Growing Peak Day Capacity More Natural Gas Expensive and Demand Difficult to Build LNG Peak Shaving Opportunity A
Slide 12: LNG Business Overview
LNG Business Overview All Aspects of Value Chain LNG Assets • Liquefaction capacity and access to firm, low cost natural gas • LNG storage • LNG trucking (utilize multiple LNG carriers) • LNG vaporization/delivery capacity LNG Capabilities • Development, permitting, and construction (very specialize
Slide 13: UGIES' LNG Products and Services
UGIES’ LNG Products and Services LNG Liquid Sales • Sell liquid to LDC peak shaving facilities o “Summer” refill, Winter re-charge (including options) • Sell liquid to remote industrials, truck fleets, drilling rigs o Provides upside to the business, more dependent on oil/gas spreads LNG “Vapor Sale
Slide 14: The Temple LNG facility is UGI's core LNG asset
The Temple LNG facility is UGI’s core LNG asset serving customers in the Middle Atlantic and New England. • Located near Reading, PA • Storage Capacity: 15 million gallons of LNG or about 1.25 Bcf • Liquefaction Capacity: up to 10,000 Dth/day (120,000 gallons per day) • Vaporization Capacity: 205,00
Slide 15: Energy Services peak shaving business using Temple LNG and propane air plants
Energy Services has built a successful peak shaving business using Temple LNG and a series of six propane air peak shaving plants to serve load on various UGI Utility systems. Eastern Pennsylvania Williamsport PPA Hunlock PPA Whitedeer PPA Temple LNG Bethlehem PPA Liquefaction & Peaking Reading PPA
Slide 16: LNG Business Strategy
LNG Business Strategy • Continue peaking capacity build out to serve growing UGI demand and contractual obligations • Focus further business expansion in high cost capacity market areas in the Middle Atlantic and New England o Sell LNG liquid for existing peak shaving plants o Sell bundled peaking s
Slide 17: UGIES is currently making large investments in various LNG assets
UGIES is currently making large investments in various LNG assets to grow and strengthen the business Manning LNG -- Adding 10,000 Dth/d of liquefaction capacity Liquefaction in the heart of the low cost Marcellus Region to serve New England and Mid Atlantic Steelton LNG Peak Shaving -- Adding 75,00
Slide 18: Manning Liquefaction Plant
Manning Liquefaction Plant Location: Mehoopany, PA, Scope: New 10,000 Dth/day natural gas driven, nitrogen cycle LNG plant with 0.5 million gallons of LNG storage Cost and Schedule: $60 MM; Under construction; Target COD 1Q Cal 2017 9 Confidential
Slide 19: Manning LNG Plant Location
Manning LNG Plant Location • Plant located in the heart of the northern Marcellus • Directly Connected to UGIES’ Auburn Gathering System • Low cost Marcellus gas provides competitive advantage • Low cost winter gas facilitates re-charge for peak shaving 10 Confidential
Slide 20: UGI's LNG business is well positioned for further growth
UGI’s LNG business is well positioned for further growth NEW ENGLAND Manning LNG Eastern Middle Atlantic Temple LNG • Favorable market fundamentals • Strong asset base, capabilities Steelton LNG • Track record of success 11 Confidential
Slide 21: Appendix
@ Energy Services Appendix Confidential
Slide 22: Steelton Satellite LNG Plant
Steelton Satellite LNG Plant Location: Steelton (Harrisburg), Pennsylvania Scope: • Large scale peak shaving facility • 75,000 Dth/day of LNG vaporization capacity • Two million gallons of full containment LNG storage • Two truck unloading/loading bays Schedule: Under construction; Target commercial
Slide 23: Portable LNG Peak Shaving
Portable LNG Peak Shaving • Portable LNG Peak Shaving consists of small scale, trailer mounted, storage and vaporization units • Portable peak shaving facilities require less land, are easier to site, and faster to deploy than permanent facilities • Portable peak shaving facilities can be located at
Slide 24: Use of Technology to Improve Customer Experience & Drive Efficiency
Use of Technology to Improve Customer Experience & Drive Efficiency
Slide 25: AmeriMobile R.O.A.D
AmeriMobile R.O.A.D Route Optimization And Dispatch Tony Rosback - COO Jim Maguire - CIO
Slide 26: Distribution: Size of the Prize (Retail)
Distribution: Size of the Prize (Retail) People Costs per Year ≈$460 MILLION! Vehicle Fuel per Year ≈ $47 MILLION! Vehicle R&M per Year ≈ $52 MILLION! Vehicle Miles per Year ≈ 137 MILLION! Using internal efficiencies to offset inflation 3
Slide 27: AmeriMobile ROAD
AmeriMobile ROAD Route Planning/Visualization (SAP) AmeriMobile Handheld 4 ( DRIVING EVERY DAY —
Slide 28: Creating Effective Routes
Creating Effective Routes Coaching/Training Opportunities Real Time Monitoring During the Day 5
Slide 29: Efficient Delivery – Driver's Device – Key Functions
Efficient Delivery – Driver’s Device – Key Functions Route/Order Detail Customer Detail Re-Route/Optimize Safety Checks 6
Slide 30: European LPG Business Highlights
European LPG Business Highlights
Slide 31: UGI International's footprint in Europe
UGI International’s footprint in Europe • Developing leading position through innovation and responsiveness West • Looking for efficiency and performance thanks to our industrial, logistics and sales footprints Finland • Maintaining our highly skilled teams Sweden • Developing Bulk business with div