UGI Presentation 2016 Energy Forecast

What Will We Cover Today

•  An Introduction to UGI

•  UGI’s Infrastructure Replacement & Betterment

•  UGI’s Growth Results and New Expansion Initiatives

•  UGI Online Tools

Introduction To UGI

UGI Is A Leading Gas Utility In PA

Total Gas Customers 617,362

Total Electric Customers 61,735

Miles of UGI Gas Main Infrastructure 12,190 miles

Infrastructure Replacement & Betterment

UGI – Pipeline System Materials Contemporary

88% CI / BS / WI

12% ~ 366 miles CI/

WR ~ 1,018 miles

BS

UGI has an aggressive capital replacement plan

• EOY 2026 – All Cast Iron Eliminated

• EOY 2041 – All Bare Steel and Wrought Iron Eliminated

• Estimated cost of $1.2 Billion

UGI Replacement & Betterment Investment

Accelerated infrastructure replacement: record level of capital expenditure •  Replaced 32 miles Cast Iron in FY 2015

•  Replaced 26 miles Bare Steel / Wrought Iron in FY 2015

Replacement & Betterment Investment ($MM)

40.5 50

60.3 63.4

84.5

101.1

113.2

150

0

20

40

60

80

100

120

140

160

2009 2010 2011 2012 2013 2014 2015 2016 Budget

Growth Results and New Initiatives

Why Growth – Move to Natural Gas •  Unique Situation

o  Gas remains economically favorable as heating source compared to Oil, Propane, & Electric

o  Gas prices continue to stabilize near historic lows o  Gas is an American = “Pennsylvania Fuel”

Annual Consumption (Gal/yr) $1.00 $1.50 $2.00 $2.50 $3.00

2,000 - 3,000 $1,200 - $1,7000 $2,200 - $3,200 $3,200 - $4,700 $4,200 - $6,200 $5,200 - $7,700 3,000 - 4,000 $1,700 - $2,300 $3,200 - $4,300 $4,700 - $6,300 $6,200 - $8,300 $7,700 - $10,3004,000 - 5,000 $2,300 - $2,900 $4,300 - $5,400 $6,300 - $7,900 $8,300 - $10,400 $10,300 - $12,9005,000 - 6,000 $2,900 - $3,500 $5,400 - $6,500 $7,900 - $9,500 $10,400 - $12,500 $12,900 - $15,500

*Natural gas costs based on PNG rates as of December 2015Savings may vary based on rate of consumption and usageFor a personalized savings estimate (including the GET Gas monthly surcharge), please use our Online Savings Calculator

OIL

Average Annual Savings Switching from Oil to Natural Gas*Price of Oil per Gallon

Natural Gas Conversion Statistics •  Since 2008 UGI converted:

•  53,000 households •  73 large commercial & Industrial facilities •  $72M in 2015 to extend service to new customers (~$76M in 2016)

•  Pre-2015 average annual spend was $40 million

•  In 2015, the 53,000 households that converted to natural gas saved

approximately $91 Million!!!

•  New Technologies / Future Demand •  11 Combined Heat and Power Projects •  16 Natural Gas Vehicle Fueling Stations •  46 Large potential Industrial Customers on Deck

PA Natural Gas Benefits •  Natural Gas Customer Impact 2008 vs. 2015

•  Savings due to lower gas costs (Marcellus Shale Impact): •  $700 a customer per year •  $415 Million saved in 2015 compared to 2008

•  More than 90% of the natural gas UGI delivers through our system is produced in the Marcellus Shale Region •  Marcellus NG priced at +33% discount to NYMEX

•  UGI Is First Gas Utility in PA with Direct Connection to Utica Shale •  Released on 11/4/14 to further help in price stability

–  Connection links 2 Marcellus and 1 Utica Shale Well in Northern Tioga County –  Supply from 3 wells can provide the needs to meet > 50,000 homes

Successful Conversions

Kalahari

•  Site/Project Description: –  Location: Mount Pocono, Monroe County –  Role/Purpose: Mixed-Use Development, Resort and Water Park

•  Project Type: New construction

•  UGI Project Details: –  Project supports new construction in Mount Pocono resort area –  Two-Part Project

•  Part 1: 22,500 ft of 12-inch plastic main extension •  Part 2: 9,500 ft of 8-inch steel high pressure main extension

–  Project supported by $5M RACP grant obtained by Pocono Mountain EDC

•  Community/Business Impact: –  Attracted over $200M in private investment to the area –  Added estimated +1,000 jobs to region

Sanofi-Pasteur

•  Site/Project Description: –  Location: Swiftwater, Monroe County –  Role/Purpose: Mixed Commercial/Residential Use

•  Project Type: Main Installation/Extension

•  UGI Project Details: –  Project supports commercial and residential expansion in Monroe County –  Installed 35,000 ft of 12-inch HDPE and 7,500 ft of 12-inch steel

•  Community/Business Impact: –  Begins in Arcadia Business Park and can provide direct access to approx. 100

residential properties and 20 commercial properties it passes –  Allowed for service expansion to Mt. Airy Casino and Pocono Mountain School

District

Trillium CNG Station

•  Site/Project Description: –  Location: Gordon Borough and Butler Township, Schuylkill County –  Role/Purpose: CNG Station

•  Project Type: Natural Gas Fueling Station

•  UGI Project Details: –  First phase of CNG refueling project supported heavy-duty vehicles –  Second phase allows for firm service at station, rather than interruptible –  Installed 9,200 of HDPE and 7,500 ft of 12-inch steel –  Awarded +$1.3M in grants from Department of Environmental Protection and

Department of Economic Development

•  Community/Business Impact: –  Original project resulted in a 1.25M pound reduction in CO2 emissions. –  Second phase can increase CO2 emissions reductions to +2M pounds

Panda Patriot Project

•  Site/Project Description: –  Location: Muncy, Lycoming County –  Role/Purpose: Power generation plant

•  Project Type: New construction

•  UGI Project Details: –  Installation of ~42,000 feet of 12-inch high pressure steel natural gas main –  Also installed two stations at either end of the pipe: Panda Patriot Meter

Station and Transco Gate Station –  Project operational in July 2015; commercially operational in July of 2016

•  Community/Business Impact: –  Panda Patriot Plant can supply power for ~1M homes in N. PA (829 mW) –  Creates approximately 500 construction jobs, as well as 27 jobs to directly

operate the plant and 45 jobs to indirectly support the plant

Gatorade CHP

•  Site/Project Description: –  Location: Mountain Top, Luzerne County –  Role/Purpose: Manufacturing and Warehousing

•  Project Type: Combined Heat and Power

•  UGI Project Details: –  Project will retain majority of existing 6-in HDPE lines, retiring small sections

of existing 6-in HDPE and installing new HDPE sections –  Facility must continue normal operations during installation of lines and

equipment

•  Community/Business Impact: –  Largest manufacturing facility at the company, producing +43M cases annually –  Provides additional +250 permanent full-time jobs at plant and warehouse

GET Gas Program

•  The UGI Growth Extension Tariff(GET) is designed to provide natural gas service to Unserved or Underserved areas

•  Goal was to develop an innovative and creative way to expand natural gas service outside of current tariff extension guidelines

•  Available as a 5-year pilot to customers of UGI Utilities

•  GET Gas customers will pay a monthly surcharge over a 10-year-period to cover the cost of the main extension

•  UGI designated $75 million for the approved pilot program

Visit www.ugi.com/getgas

Forecasted Underserved and Unserved Lead Saturation Demand

$171

$31

$44

$-

$20

$40

$60

$80

$100

$120

$140

$160

$180

UGI PNG CPG

Million

Company

BUDGET

FORECAST

•  GET Leads: ~ 4,859 •  Potential Exceeding $200 Million vs. Pilot of $75 Million

Riverside Borough

•  GET Gas Unserved Community Example: Riverside Community – Construction In-Progress • Proactive Community Leadership • Outreach to potential customers • Permit Fees to be waived – Declaration Signed • Low cost installations

•  Prequalifies for GET Gas • 636 Parcels • Estimated GET Market Share = 445 • Estimated Cost per Customer maximum = $8,263 • Current Leads = 136

GET Gas Program Demand - Riverside

Online Tools

Tools For Businesses •  Fuel Cost Comparison Calculator

o  Compare fuel costs for your business www.ugi.com/businesscalculator

•  Check for Natural Gas Availability

o  Find out if natural gas is available to your business www.ugi.com/gasavailability

•  Business Energy Advisor

o  Get energy savings advice specific to your industry and type of use www.ugi.com/energyadvisor

•  Our Blog, UGI Connection

o  Read real life examples from other businesses who have made the switch http://blog.ugi.com

Thank You