05/2007

3 Working Smart For You Access to multiple Midwest markets Access to multiple supply sources Access to Michigan & Ontario storage fields Flexible services Flexible pricing

4 Great Lakes Gas Transmission Interstate natural gas transmission system transporting gas for others Headquartered in Troy, MI. near Detroit $1.2 billion in assets $272 million in revenue in 2006

5 Great Lakes Gas Transmission & the Midwest/Northeast Pipeline Grid

6 Great Lakes Gas Transmission Typical Peak Receipt/Deliveries ANR Pipeline CMS Energy Northern Natural TransCanada PipeLines Union Gas Viking Gas Carlton 400 MMcf/d Fortune Lake 900 MMcf/d Farwell 650 MMcf/d (R) Chippewa (CE) 225 MMcf/d Belle River (MC) 225 MMcf/d (R) St. Clair 1.6 Bcf/d N Emerson 2.3 Bcf/d (R)

7 Facilities 2,000-mile, 36 diameter pipeline system traverses Minnesota, Wisconsin, and Michigan –MAOP 974 psi 14 compressor stations with combined 450,000 hp Over 60 receipt and/or delivery points

8 Forwardhaul or Backhaul Forwardhaul: bringing Western Canada Sedimentary Basin gas to the Midwest and Ontario Backhaul: supplying Manitoba, Minnesota, Wisconsin, and Michigan markets from Dawn or Chicago hubs –Currently no fuel charges

9 Interconnects Interconnects directly with TransCanada, Northern Natural, ANR, as well as: In Minnesota Minnesota Energy Resources City of Duluth, MN Otter Tail Power In Wisconsin NSP/Xcel Superior WL&P In Michigan Bluewater Gas Storage Consumers Energy Detroit Edison (via SEMCO) MCV MichCon SEMCO WEPCo

10 Supply Options Western Canadian Sedimentary Basin –via TCPL at Emerson Chicago hub supply –via ANR at Fortune Lake and Farwell Dawn hub supply –via TCPL at St. Clair

11 Storage Access Northern MI –130 Bcf working gas Central MI –289 Bcf working gas Southeast MI –219 Bcf working gas Dawn, Ontario –240 Bcf working gas

12 Eastern Zone Storage Access

13 Michigan Production Production region Goose Creek & Jordan Valley –100 MMcf/d metering capability –105 Bcf production in 2006* Hudson Richfield *Michigan Public Service Commission. Annual gas production summary.

14 Services Great Lakes offers a full menu of transportation services –Standard FT Service (long-term, short-term, daily, intra-day) –Limited Firm –Interruptible –Seamless service (off system capacity) –Market Center services

15 FT & LFT Service Firm service –Provided every day, without interruption –Short term service for as little as one day –Secondary point flexibility –Intra-day available Full MDQ over less than 24 hours

16 FT & LFT Service Limited Firm service –Available for a pre-determined number of days within a pre-determined time period (i.e., available 120 out of 151 days) –May be lower cost alternative firm service

17 Short Term Services Firm services offered daily –Daily and intra-day longhaul –Daily shorthaul Short-term FT customers treated equal to long-term FT customers Subject to auction process

18 Auction Procedures Auctions take place in GLConnect –Requires username and password Bidders should have credit coverage for the term they are bidding –Or subject to pre-pay All posted bids are binding

19 Auction Procedures Nearly all auctions are blind (closed) Bidders can enter multiple bids under the same entity name –Total MDQ cant exceed offered MDQ Unsold auction capacity will be sold on a first-come, first- served basis at the highest awarded bid rate –Until 2:00 p.m. CCT

20 Auction Timing Term services (monthly, seasonal, annual) –Posted for hours, ending at 9:00 a.m. CCT Next-day offerings –Posted 8:00 a.m. – 9:00 a.m. CCT Intra-day offerings –Posted 9:00 a.m. – 9:30 a.m. CCT on weekdays –Posted 9:30 a.m. – 10:00 a.m. CCT on weekends and holidays

21 Segmentation Firm transporters can segment capacity within path to serve multiple markets Forwardhaul and backhaul gas to a common delivery point or from a common receipt point –Increase receipt & delivery volumes with no reservation cost increase to maximum rate contracts

22 Segmentation Flexibility Emerson St. Clair Fortune Lake Farwell 100 EXAMPLE: 100 Mdth/d Emerson to St. Clair contract Total Emerson Receipt:100 Mdth/d Total Farwell Receipt:200 Mdth/d Total Fortune Lake Deliv:200 Mdth/d Total St. Clair Delivery:100 Mdth/d

23 Capacity Release Firm shippers have the right to release capacity to qualified third parties –Full or partial MDQ –Segmented releases

24 Interruptible Service Less expensive than FT Typically used for shorter paths and/or backhauls on a short-term basis Not subject to the auction process

25 Seamless Service Contract with Great Lakes to/from points on other pipelines –Example: Chicago to Dawn service Great Lakes acquires transportation on interconnecting pipeline One rate, one nomination – Great Lakes does the rest

26 Market Center Services Parks and loans available (as system conditions permit) at all receipt and delivery points Title transfers available at all receipt and delivery points –Currently no charge Interruptible in nature

27 Cost Based Rates Three zone system –$0.12/dth to Carlton (Northern Natural) Approximately 1.2% fuel –$0.20/dth to Fortune Lake (ANRPL) Approximately 2.0% fuel –$0.35/dth to St. Clair (TransCanada) Approximately 3.5% fuel

28 Transporters Use 13 fuel segments Determined by the 15 th of each month Number of segments 12-month average* 82.20% 92.47% % % % % * As of May. Actual fuel percentages posted on Number of segments 12-month average* 10.30% 20.58% 30.85% 41.12% 51.39% 61.66% 71.93%

29 Progressive Pricing Policies Negotiated rate authority Market sensitive rates on short term services –Posted daily as available –Discounts may apply to secondary points

30 Progressive Pricing Policies Rate ranges –Floor and ceiling capped rates Pricing certainty –Locking in price for longer term Seasonal firm service –Variable MDQ for seasonal needs

31 Working Smart For You Access to multiple Midwest markets Access to multiple supply sources Access to Michigan & Ontario storage fields Flexible services Flexible pricing