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Natural Gas Market Dynamics. Price Volatility Supply and Demand Fundamentals Dominion East Ohio Market. Price Volatility. Source: www.hessenergy.com. Source: www.hessenergy.com. Source: www.nymex.com. June 2, 2009 Gas Daily Headlines. NYMEX leaps 41.4 cents, but cash prices weaken
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Natural Gas Market Dynamics • Price Volatility • Supply and Demand Fundamentals • Dominion East Ohio Market
June 2, 2009 Gas Daily Headlines • NYMEX leaps 41.4 cents, but cash prices weaken • “the NYMEX price soared ‘for no good reason’ given that fundamentals have not changed much from last week.” • Bears in control as new hurricane season begins • “nothing - save a catastrophic hurricane … - should prevent gas prices from falling even further this summer” • S&P: Outlook murky for North American gas sector • “the key for oil and gas is the development of demand, and demand right now is heading downhill…” See: www.platts.com
Weather-Normalized R&C Demand Is Less Source: www.eia.doe.gov
Industrial and Power Generation Demand Is Much Less Source: www.eia.doe.gov
Key Drivers: Domestic Production Source: www.eia.doe.gov
Energy Choice Market Shares – 12/08 Other 13 F E D Aggregation (36%) C B A Energy Choice Participation Rates: Residential Non-PIPP: 78% Nonresidential: 75%
What is Dominion Doing Now? • Dominion is continuing its transition from traditional regulated natural gas sales to a more competitive market for its customers • Dominion will continue to focus on providing regulated distribution service to its 1.2 million customers • Dominion conducted its first Standard Service Offer auction in August 2006 to purchase natural gas for its sales customers • In February 2009, Dominion conducted two more auctions for Standard Service Offer (SSO) and Standard Choice Offer (SCO) commodity service • In April 2009, Dominion placed all Choice-eligible customers into a direct retail relationship with an Energy Choice supplier at the SCO rate established in the auction • SSO/SCO auction process will be repeated in 2010
Residential/Small Commercial www.dominiongaschoice.com Larger Commercial/Industrial www.dom.com