Steve Baker President Natural Gas in Ontarios Energy Mix Seeing The Bigger Picture

2 Union Gas – A Spectra Energy Company Robust natural gas infrastructure Industry Economic Contributions Total Ontario natural gas customers = 3.4 million Ontario natural gas utilities employment = 4,300 Canadian natural gas sector employment = 172,000 (Canada 2010) Ontario capital investment = $750 million to $1 billion annually Taxes paid by Ontario gas utilities = $298 million in 2011 (Municipal, Prov., Fed.)

Waterloo/Brantford District Distribution Area: From Port Rowan, in the south, to Wiarton in the north. Pipelines: 8,400 kilometres Customers: 263,350 Property Tax Paid: $10.6M in 2012 District Offices: Waterloo, Guelph, Cambridge, Brantford, Simcoe, Hanover, Owen Sound Union Gas Employees: Waterloo/Brantford District – 143 Brantford Call Centre – 127

4 4 Ontarios Primary Energy Mix Natural gas: a critical fuel for Ontario (TJ/%) Natural Gas % Total Coal % Total refined petroleum products % Coke oven gas % Coke % Steam % Primary electricity, hydro and nuclear % Gas plant natural gas liquids (NGL's) % Natural Gas % Residential Percentage of customers: 92% Annual throughput: 34% Power Generation Plants: 59% (2/3 of Industrial Consumption) Industrial Percentage of customers: 1% Annual throughput: 45% Commercial Percentage of customers: 7% Annual throughput: 21%

5 Ontario Power Mix 2012 Natural gas: a key contributor to energy mix Hydro 22% Natural Gas 15% Nuclear 56% Wind 3% Coal 3% Other 1% Generation by Fuel Type Nuclear 36.2% Natural Gas 27.9% Coal 9.2% Hydro 22.2% Wind 4.2 Other 0.3% Installed Capacity

Electricity Generation from Neighbouring States 6

7 Natural Gas Meeting Peak Day Demand

8 Ontarios Electricity Rates & Surrounding Provinces/States Ontarios electricity rates must be competitive (Based on average residential and industrial consumption HOEP + global adjustment)

9 As energy costs escalate, natural gas remains affordable Ontarios Total Residential Bill Prices (Ontario Average Electricity is the average price of all electricity distributors across Ontario as reported by Statistics Canada; HST and Ontario Clean Energy Benefit are not included)

10 Natural Gas - Conservation Success Union Gas conservation programs saved customers $1.4 billion in costs ( )

11 North American Market Dynamics Western Canada Decline 2-3 PJ/d 2-3 PJ/d Marcellus/UticaGrowth 8 PJ/d Gulf Coast Growth 1-2 PJ/d MidcontinentGrowth MidcontinentGrowth BC Growth Ontarios robust infrastructure has a competitive advantage

12 Diversifying Ontarios Natural Gas & Infrastructure Supply New proposed infrastructure will move more supply to Ontario

13 Opportunities for Ontario Natural gas prices in Canada have been on a steady decline since mid-2008 due to increasing supply and economic trends Residential savings of $275-$400/year due to new shale supplies Commercial customer savings of $9,000-$15,000/year Industrial customer savings of $10-20 million/year $3-5 billion/year in savings to Ontario consumers

Connecting New Communities – rural & remote Opportunities for Ontario Power Generation – greater role in fuel mix Natural Gas for Transportation – heavy duty return-to-base vehicles Industrial – retain and attract energy intensive industry (steel/petrochemical/fertilizer) Northern Ontario – mining opportunities 14

15 How Energy Industry, Government and Regulators Can Help Get the word out about opportunities related to natural gas Create efficiency & certainty around energy policy & regulation

16 Thank you Natural Gas in Ontarios Energy Mix – Seeing The Bigger Picture