AGA Advocacy Priorities A discussion on how best to advance AGA’s top advocacy priorities based on possible election outcomes.

AGA Advocacy Priorities Pipeline Safety: Represent Natural Gas Utility and Customer Interests in the Development of Federal Pipeline Safety Legislation and Regulation Energy Policy: Secure Recognition of the Benefits of Natural Gas in Federal and State Energy Policy LIHEAP: Maintain LIHEAP Funding Natural Gas Supply: Advocate Natural Gas Supply Diversity and Responsible Resource Development Demand-Side Policies: Advocate Demand-Side Policies that Reflect the Benefits of the Use of Natural Gas Dividend Taxes: Make Permanent Low Dividend and Capital Gains Tax Levels Innovative Rate Approaches: Advocate for Innovative Rate Approaches that Promote Natural Gas System Integrity and Efficiency NARUC Outreach: Represent Natural Gas Utility and Customer Interests before NARUC to Enhance Awareness of Natural Gas Market Conditions and LDC Efforts to Serve Customers Building and Energy Codes: Advocate Building and Energy Codes, Appliance Standards, and National Policies that Enable the Efficient and Safe Use of Natural Gas in Homes and Buildings Innovative Rate Approaches: Advocate for Innovative Rate Approaches that Promote Natural Gas Distribution System Expansion Natural Gas as a Transportation Solution: Advocate Federal Policies that Promote the Development of Natural Gas as a Transportation Solution for Improving Air Quality and Reducing Dependence on Energy Imports Advocate for Well-Functioning Natural Gas Markets: Advocate before FERC, the Commodity Futures Trading Commission, and Congress to Ensure Well-Functioning Natural Gas Markets and the Continued Reliability of Pipeline Service to Bring Natural Gas Supplies to LDC Markets Decrease Taxes on Utilities: Support Measures that Decrease Taxes on Utilities Innovative Rate Approaches: Advocate for Innovative Rate Approaches that Align Shareholder and Customer Incentives Air Regulations: Protect LDC Customers and Prevent Unworkable Burdens on Utility, Commercial and Industrial Operations Infrastructure Security Issues: Engage with Congress, the Administration and Federal Agencies to Ensure that Federal Policies Address Gas Utility Physical Infrastructure and Cyber Security Concerns R&D Priorities: Support for Funding of Natural Gas End Use and Infrastructure R&D Seek Workable Accounting Rules: Work with Other Trade Associations that Represent Network Utilities to Secure Accounting Rules that Do Not Impose Burdens on Utilities by Increasing the Variability of Reported Earnings Federal Environmental Permits: Promote Innovations that Streamline Federal Environmental Permits for Transmission and Distribution Projects PCBs and Asbestos Pipe Wrap: Prevent Burdensome Requirements and Obtain Workable Rules

Possible Scenarios White House: Obama vs. Romney The outcome will impact what issues rise to the top of the priority list and how we lobby.

Scenario 1 Obama wins and the Senate and House remain the same. Lame duck? What gets done? CR? Tax/Dividends EPA regulations

Scenario 2 Obama wins, Senate flips and House remains controlled by Republicans. Lame duck? Is there any appetite for Republicans to deal? If so, on what issues? CR?

Scenario 3 Romney wins, Senate and House remain the same. Lame duck? What gets done? CR? Tax/Dividends EPA regulations

Scenario 4 Romney wins, Senate and House are controlled by Rs. Is there a lame duck? Do Rs wait? CR?

Looming issue As you move into 2013, the looming issue will be dealing with the fiscal crisis. What is the timeline for proposals to start being promulgated? What might they look like? Who will be the drivers?

Administration What does Obama’s Administration look like? What does Romney’s Administration look like? What are their priorities?

Business Industry Political Action Committee; www.bipac.net Senate Snapshot Possible pick-ups for Republicans Tier 1: Nebraska, North Dakota Tier 2: Montana, Missouri, Virginia Tier 3: New Mexico, Wisconsin, Ohio Business Industry Political Action Committee; www.bipac.net

National Governors Association; www.nga.org State Snapshot Republicans currently control 31 of 49 state houses and 29 state senates. They enjoy control of both legislative chambers and the governor’s office in 22 states. Democrats hold majorities in 17 state houses and 18 state senates, with complete majorities in 11 states. National Governors Association; www.nga.org

Executive Order on Natural Gas What does it mean now? What will it mean post election?

Strategy What are the goals for “industry” post election? Economic growth (fiscal responsibility/tax reform) Predictability/balanced approach Preservation of favorable tax treatment Reasonable LIHEAP appropriation What are AGA’s member company CEOs saying? How do AGA’s priorities fit within that context?

Where do we go from here? Refining our priorities and next steps: Do we re-order some of the priorities? Safety/pipeline expansion/direct use– Always a priority LIHEAP—grassroots, means test Dividends/deductibility of interests/bonus depreciation—Long term scenarios NGVs—price, rates, government action, trends Cyber security– What? When? Supply/production

Goals Working groups 3 month plan Campaigns for each issue Congressional, state, local

GASPAC What is the definition of “supports the industry”? What are we trying to accomplish with contributions? Are we thinking strategically?