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by David McClanahan Chairman, American Gas Association President and CEO, CenterPoint Energy

by David McClanahan Chairman, American Gas Association President and CEO, CenterPoint Energy. 2008 Natural Gas Outlook presented to the National Association of Regulatory Utility Commissioners February 19, 2008. Natural Gas Industry 2008 Priorities. 1.

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by David McClanahan Chairman, American Gas Association President and CEO, CenterPoint Energy

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  1. byDavid McClanahan Chairman, American Gas Association President and CEO, CenterPoint Energy 2008 Natural Gas Outlook presented to the National Association of Regulatory Utility Commissioners February 19, 2008

  2. Natural Gas Industry2008 Priorities 1 Conserve energy; use it more efficiently. • Numerous programs in place • Continuing to seek innovative approaches

  3. LDC Energy Efficiency Programs 2007 AGA Energy Efficiency Survey • 80 percent of surveyed companies had active or planned EE programs • Programs include: • Residential Low-Income Weatherization • Energy Audits, Consumer Education • Equipment Replacement and Retrofit • Energy Efficiency Design Assistance • Financing for EE Applications

  4. Natural Gas Industry2008 Priorities 2 Promote direct use applications as the most efficient way to use natural gas. • Most efficient energy source • Smaller carbon footprint

  5. Natural Gas: The Clean & Efficient Choice Water Heaters Average Annual Operating Cost (2007) CO2 Emissions from Residential Water Heaters $517 natural gas 1.6 natural gas electric powered by gas combined cycle 2.2 $294 electric powered by coal-generated electricity 5.9 Tons of CO2 Per Year Electric Gas Over the average 9-year life of a water heater, you’d spend $2,000 more to use an electric water heater than a natural gas water heater.

  6. Natural Gas Industry2008 Priorities 3 Work with regulators to ensure alignment of industry and customers. • Moving away from volumetric based rates • Increasing regulatory support for nontraditional rate designs and energy efficiency tariffs

  7. States with Non-Volumetric Rate Designs for Natural Gas Revenue Decoupling Other Non-Volumetric Rate Designs Rate Stabilization, Weather Normalization and/or Straight Fixed Variable

  8. Natural Gas Industry2008 Priorities 4 Ensure there are adequate supplies of natural gas to meet increasing needs. • High and volatile prices are the most • pressing issues • Significant growth from unconventional sources

  9. Natural Gas Supply Sources(January 1-December 31, 2007) Source: Bentek Energy LLC, Energy Market Fundamentals, December 31, 2007.

  10. World LNG ProductionMay Double by 2016 Source: Schlesinger & Associates team – interim briefing to the American Gas Foundation, 1/2008, World Gas Trade Model. Excludes minor or zero volumes of LNG exported from Angola, Brunei, Chile, Iran, Libya, Norway, Papua New Guinea, Russia, Saudi Arabia and Venezuela.

  11. Existing and New North AmericanTotal LNG Import Capacity Bcfd Total Capacity: 16.1 New Under Construction Existing Expansions Under Construction Existing Sources: FERC, US Coast Guard, LNG Express, WGI, LNG Observer * AEO 2006, EIA.

  12. Natural Gas Industry2008 Priorities 5 Timely recovery of prudently incurred infrastructure investment. • Significant increases in capital investment have occurred, and are likely to continue.

  13. 10 $billion per year 9 8 2000 2005 Growth in Capital Investment Gas Utility Construction Expenditures Increased from $8.5 Billion in 2000 to $10 Billion in 2005

  14. Natural Gas Industry2008 Priorities 6 Secure necessary funding for low-income home energy assistance programs. • Energy costs represent greater portion of a consumers budget • Eligible households increased 78 percent

  15. byDavid McClanahan Chairman, American Gas Association President and CEO, CenterPoint Energy 2008 Natural Gas Outlook presented to the National Association of Regulatory Utility Commissioners February 19, 2008

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