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Legislative Update Florida Gas Utility 2010 Annual Meeting June 10, 2010 Dave Schryver

the voice and choice of public gas. Legislative Update Florida Gas Utility 2010 Annual Meeting June 10, 2010 Dave Schryver American Public Gas Association. U.S. Municipal Gas Systems. National Gas Policy . Financial Market Reform Energy Bill NGA Section 5 Reform Supply

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Legislative Update Florida Gas Utility 2010 Annual Meeting June 10, 2010 Dave Schryver

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  1. the voice and choice of public gas Legislative Update Florida Gas Utility 2010 Annual Meeting June 10, 2010 Dave Schryver American Public Gas Association

  2. U.S. Municipal Gas Systems

  3. National Gas Policy • Financial Market Reform • Energy Bill • NGA Section 5 Reform • Supply • Climate Change Legislation • Pipeline Safety Act Reauthorization • Expansion of Build America Bonds

  4. Financial Markets Reform Goal: Restore public confidence in the pricing of natural gas • APGA supported greater transparency in 2005 • Public gas systems use market instruments to manage price volatility • Our transactions do not pose systemic risk • APGA legislative goal was to ensure transparency without removing hedging tools

  5. Financial Markets Reform • House passed Wall Street Reform & Consumer Protection Act in Dec. 2009 by a vote 223-202 • Senate passed it’s version of the same bill May 20 by a vote 59-39. • Both bills include end-user exemption • Senate version imposes fiduciary duty on dealer

  6. Energy Legislation • House Passed Climate/Energy Bill last • Primarily a climate change bill • RPS, Carbon Labeling • Senate Energy Committee Approved Energy Bill Last June • Section 5 • Supply • Cease and Desist • Alaska NG Pipeline

  7. Natural Gas Act Section 5 – FERC Refund Authority • APGA is pushing Congress to change the law to give the agency that oversees interstate pipeline rates, Federal Energy Regulatory Commission (FERC), refund authority to protect consumers.

  8. Natural Gas Act Section 5 – FERC Refund Authority • Certain pipelines are proven to be over-charging consumers • This authority would allow FERC to grant refunds to consumers when it is proven a pipeline is charging more than just and reasonable rates

  9. Natural Gas Act Section 5 – FERC Refund Authority • Senator Maria Cantwell from Washington State is championing reform of NGA Section 5 on the Senate floor

  10. Access to U.S. Supply APGA has long maintained the additional supply is a fundamental component to long-term affordable natural gas

  11. Supply Estimates Up100 year supply at current usage rates *35% increase from last report

  12. Access to U.S. Supply Moratoria removed in 2008 on OCS on East and West Coast A recent Senate Energy bill contains language that opens Eastern Gulf of Mexico for E&P BP oil spill changes the dynamics of offshore drilling debate

  13. April 2010 Administration proposes new areas for Exploration & Production

  14. Expect a price on carbon Active EPA Regulator Endangerment Finding GHG Registry Congress Cap and Trade

  15. Environmental Protection Agency 2001-2008 2008-Now

  16. Environmental Protection Agency 2008-Now • GHG Reporting Rule • Oct. 2009 • Endangerment Finding • Dec. 2009 • Vehicle and Tailoring Rule • April 2010 • Stationary Source Emissions • ???

  17. Climate Change Legislation House of Representatives American Clean Energy Security Act (H.R. 2454) passed in 2009 by a vote 217-212 Senate American Power Act Released May 12, 2010 Kerry-Lieberman

  18. Climate Change Legislation • Emissions Cap begins is 2012 • Gas LDCs come under cap in 2016 • Only Gas LDCs with 460, 000 MCF (25,000 Co2 equivalent) are regulated • Industrial users over 460,000 MCF responsible to track their own emissions • Offset credit for repairing pipeline leaks methane emissions • Methane to Co2 ratio – 25:1

  19. Climate Change Legislation • Gas LDCs will get 9% of “free allowances” • 20% (Senate) 33% (House) used for efficiency • Remaining credits used to protect consumers • Buy remaining allowances if you don’t meet your yearly targets – auction or open market

  20. What can Gas LDCs expect under a climate program? • Tracking & managing emissions for customers • www.apga.org/calculator • Yearly compliance with EPA - permits • Potentially buying & selling allowances on the market or buying from a government auction • Find ways to reduce emissions to meet the cap (efficiency, load reduction, etc.) • Stress on U.S. natural gas supply and price from fuel switching

  21. Pipeline Safety Reauthorization • House and Senate Hearings • Due to be Reauthorized in 2010 • APGA Supports Clean Reauthorization • Issues • Expansion of EFV Requirements • Change in User Fees • Change in Low-Pressure Transmission Regulation

  22. Build America Bonds • Build America Bonds (BABs) created in the American Recovery and Reinvestment Act of 2009 • BABs permit municipalities to issue taxable bonds to a broader investment market and receive a 35% subsidy on the interest rate • APGA pushing expansion of BABs for prepays

  23. APGA Annual Conference Sheraton San Diego Hotel & Marina July 25-28

  24. WWW.APGA.ORG

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