Retail Gas Market Outlook September 22, 2004 Ron Jennings, Director Gas Supply Laurie Duhan, Director Gas Pricing and Tariffs Don Dasher, Director of Community Services Outlook for the Winter

2 Gas prices have remained high Gas prices this summer were approximately $0.70 per Dth higher versus 2003 Gas Supply & Demand are in tight balance –US Drilling is up 15% from last September –US Production is up only marginally compared to last year –US Storage refill is 7% above last year’s levels and 9% above the 5-year average, and expected to be full for this winter BGE storage is on target Weather - the market expects a “normally” cold winter until proven otherwise

3 US Gas Rigs In Service

4 Storage levels are 9% above 5-year average

5 NYMEX Winter Strip (November-March) $/DT Date Traded

6 Gas Commodity Price Comparisons BGE’s MBR Rate Average Rate Est c/th Act 72 c/th Act 59 c/th Act 47 c/th

7 Total Winter Gas Bill Residential Heating Customer Normal Avg Commodity Rate c/th 15% warmer than Normal Avg Commodity Rate 47 c/th 13% Colder than Normal Avg Commodity Rate 59 c/th 2% Colder than Normal Avg Commodity Rate 72 c/th $607 $ $592 $396

8 What to Expect This Winter Natural Gas will be available to meet our customers’ needs The current winter outlook is that total gas bills will be higher than last winter – with normal weather Prices remained high this summer –The gas in storage is more expensive than in prior years –Will not mitigate the cost of winter flowing gas

9 Limited Income Assistance Campaign Purpose of Campaign: To encourage more customers to apply for financial assistance from the Office of Home Energy Programs Target Audience: Fixed and Low-Income Households Communication Vehicles –Outdoor: Mass Transit Ads and Billboards –Church and Community Center Fliers –Radio talk shows –Print –Service eXpress Newsletter Ads to run October February 2005

10 Energy Management Campaign Primary Purpose: To educate customers on energy prices while helping to control energy usage and energy bills Target Audience: Mass Market Media: TV, Radio, and Service and Business eXpress Newsletters Key Messages: – Preparing your home for the winter season – Reducing your usage while using energy wisely – Billing options Campaign will run from October 2004 – February 2005

11 BGE’s Fall/Winter (04-05) Outreach Campaign – Community Services In preparation for the upcoming winter season, BGE’s Community Services team identified a series of outreach populations targeting: Seniors - Senior Expos, Care Providers Workshops, Senior Source Roll-out and Senior Center OHEP application intake programs School Age Children - PTAs, Headstart and tutorial venues have been targeted for conservation education workshop and application opportunities Social Outreach - customer relocation assistance, financial education and safety workshops BGE has contacted over 11,000 customers since January 2004!

12 BGE’s Fall/Winter (04-05) Campaign Community Services Outreach In anticipation of this winter’s impact, Community Services has worked with stakeholders in planning for: OHEP Customers – –Expos provide an easy and efficient opportunity for energy assistance –Smaller venues have targeted high poverty/low participation areas of Baltimore City –In addition to financial assistance, conservation programs and winter impact information will be available Public Leadership Awareness - Ongoing activities with Baltimore City’s Mayor, Council President and Councilmanic offices to increase awareness of program availability and guidelines Social Service Customers - Educating intake workers and supervision assure efficient referral processes to eligible clients

13 Community Services Outreach Totals

14 Planned Community Services Outreach WINTER SCHEDULED ACTIVITIES CONTACT TYPEDESCRIPTIONJURISDICTIONS Employee Assistance Employee Education/Assistance at Specific Places of Employment Baltimore City and County Social Services Agency Ongoing education workshops for Baltimore City Human Services Centers Baltimore City Parent Outreach Save Energy, Save Money conservation workshop for Headstart, Primary, and Middle School parents with Energy Assistance applications given at each event Baltimore City and County Charitable Outreach Ongoing intervention workshop supporting Paul's Place in Southwest Baltimore City Baltimore City Senior Citizens Events planned for senior housing and senior centers – Senior Source Roll-out BGE Service Territory Transitional Population Three ongoing activities supporting agency programs aiding customers in transition Anne Arundel, Howard, & Baltimore City Hispanic PopulationEnergy Assistance ApplicationsBaltimore City In-Service TrainingDSS, Mercy Medical, JHHBaltimore City and County

15 Improved Commitment Process for Energy Assistance Benefits Internet application developed for energy assistance agencies to use Phase 1 for MEAP and EUSP commitments implemented July 1, 2004 Phase 2 for Fuel Fund commitments scheduled for mid- November implementation Agency workers involved in the development of the site Partnered with agencies to ensure proper technology is available at their office locations

16 Benefits of the Agency Assistance Web Site Easy and secure access –Information available outside normal BGE business hours –Individuals have passwords for access and reports are run internally to track use Accurate and timely account data –Real time collection status –Recent payments –Real-time account balance and account details Improved process efficiency –Commit funds and obtain protection when applicable in real time –View other commitments for the program year –Fax process for Fuel Fund commitments replaced by notification –Fax process for Statements of Monies Due replaced by on-line statement with print capability at agency sites Improved communications –Ability to use web site to communicate informational messages from BGE