HRM Council Environment & Sustainability Standing Committee July 7, 2011

Heritage Gas Background Heritage Gas Franchise Application submitted August 2002, NSUARB Hearing in October 2002 Heritage Gas accepted franchise in June 2003 Heritage activated its first customer in December 2003 Has grown to over 3,100 customers in seven years (approximately 20% growth per year) Wholly-owned by AltaGas Utility Group Inc.

Benefits of Natural Gas Natural Gas: Aligns with environmental sustainability policies Reduces GHG and particulate emissions Enhances energy security Avoids risk potential of oil leaks Provides competitive advantage for business attraction & retention Reduces energy costs

Heritage Gas Growth Strategy Expansions are market demand driven Expansions occur when proven economical: a feasibility test must be passed before building – typically anchored by large commercial/institutional loads Natural gas construction capital intensive: Heritage Gas has invested $140 million to December 2010 Approximately 47% of Heritage Gas customers served are residential customers

Highlights of Expansion in HRM Over seven years, in excess of 210 km of pipe installed in HRM in areas of: Dartmouth (2003); Halifax International Airport (2006); Halifax Peninsula (2007); Halifax Mainland (2010); and Bedford (2010). Over 2,760 of Heritage Gas customers are located in HRM (89%). Major customers in HRM: 3 hospitals, 4 universities, 2 large industrial customers.

Environmental Benefits to HRM Natural gas is the cleanest burning fossil fuel with 30% less greenhouse gas produced than heating oil, zero sulphur dioxide generation and zero particulate emissions Our customers have reduced greenhouse gas emissions by over 108,000 tonnes: the equivalent of removing 21,000 cars from Nova Scotia highways Most large volume Bunker C users in HRM have converted to natural gas, causing significant particulate emission reductions on the Peninsula

Economic Benefits to HRM Heritage Gas has invested approximately 90% of its total $140 million capital investment in HRM Cumulative employment person hours from 2003 to 2010 totalled nearly 530,000 hours; of these, approximately 95% resided within HRM Last year in HRM, approximately 250 persons were employed in construction at the peak of the season The Heritage Gas Authorized Dealer Network (ADN) has 21 members and employs over 400

Economic Benefits to HRM In 2010, Heritage Gas customers saved over $30 million, savings of 35-60% over oil 25 HRM facilities have converted to natural gas, resulting in direct energy savings in the order of 30 to 40% Natural gas provides increasingly larger business attraction and retention opportunities for HRM

Comparative Pricing – Natural Gas Advantage Gas to remain an excellent value due to domestic resource abundance Upward pressure on oil pricing because of supply and global uncertainty

How Can the ESSC Help? Liaising with Heritage Gas to encourage and promote growth of the natural gas system within HRM Fostering ongoing positive relationships between HRM and Heritage Gas at all levels Supporting the connection of HRM facilities to the natural gas system Supporting Heritage Gas in its efforts to convert DND facilities to natural gas

How Can the ESSC Help? Helping to facilitate expansions in HRM (particularly in residential neighbourhoods) by working with Heritage Gas to manage cost pressures: cost of permitting fees and the permitting process cost of pavement impact charges proposed depth of cover increases HRM By Design rules

Conclusion Heritage Gas is looking forward to continuing growth in HRM Thank you for providing Heritage Gas with this opportunity to update the ESSC! Questions?