1. de·reg·u·la·tion dē- ˌ re-gyə- ˈ lā-shən The act or process of removing restrictions and regulations DEREGULATION

2. In the early 1980's the government decided to breakup one of the largest monopolies of our time. AT&T handled all long distance service for the entire country. They had invested in all of the phone lines, poles and technological advances in the telecommunication industry. AT&T charged its customers whatever rates they wanted to. Some rates were as high as $1.00 per minute, billed in full minute billing. So, if you talked to your Aunt in Texas for 10 seconds you were charged for the full minute. The government stepped in and believed that by removing the monopoly and creating fair competition in the marketplace rates could be lowered; this is known as deregulation. DEREGULATION BRIEF HISTORY

3. Sprint and MCI entered the picture, they wanted to take away as many of AT&T's customers as possible in the shortest amount of time. How could they do that? Provide customers with the same reliable service and provide better pricing! Sprint and MCI leased lines from AT&T and made their money on the revenue they generated from the long distance usage. As the years went on, thousands of 'resellers' of long distance entered the industry. DEREGULATION BRIEF HISTORY

4. We are going to use one utility company as our training example. Let's use Columbia Gas of Ohio (COH). Columbia Gas of Ohio used to hold a monopoly on the natural gas used by residential and commercial customers. Federal law mandates that they cannot profit on the sale of natural gas so, it was never in their best interest to shop the open market and negotiate the best prices for its customers. So what they do is purchase natural gas from different suppliers, or on a regulated buying schedule (we’ll talk about that later). The utility companies do not care how much they charge their customers for the supply of the commodity. DEREGULATION IN UTILITY INDUSTRY

5. The utility company makes their money two ways: 1. Transportation of the commodity to customers' homes 2. Customer service fees they charge monthly. Once a consumer chooses a supplier, the utility company will no longer purchase the supply of natural gas or electricity. Once again the government stepped in and decided it's time to deregulate the utility company. IGS Energy is neither in a partnership nor directly competing with the utility company. DEREGULATION IN UTILITY INDUSTRY

6. IGS Energy understands that in order to keep customers they need to remain competitive in the marketplace and provide their customers with the best pricing available. IGS Energy forecasts each customer's usage for one full year and then purchases the natural gas and stores it within their 14 wells. They actively shop the open market for over 1 million customers and then purchase in bulk quantities; this is how they take advantage of price breaks. The theory is buy the gas as low as you can, mark it up marginally and remain competitive with the utility companies pricing. DEREGULATION IN UTILITY INDUSTRY

7. GASOLINE AT THE PUMP Imagine that you are at a four-way stop and your gas light is on in the car; you need gas and need it now. There are two Shell gas stations, one on your right and one your left. Gas station A has a gallon of 93 octane for $3.99; Gas station B has it for $3.89 a gallon. Which station are you going to? Station B, of course!! Why? Because the 93 octane gasoline is the same, the only difference you notice is the price you pay! Why pay more for the same thing when you don’t have to? The same concept holds true for natural gas, it’s all the same, the only difference is how much you pay for it! DEREGULATION- RELATIONSHIP STORY

8. LONG DISTANCE SERVICE Remember when AT&T was the only provider of long distance? They used to charge $1.00 per minute and you were billed in whole minutes which meant that if you only spoke to your aunt Mary for 10 seconds, you got billed for the entire minute. Finally, the government stepped in and broke AT&T up and allowed other companies to offer long distance. When this happened, pricing went down because of the competition for your business! These days, most long distance is only pennies per minute. Remember, long distance is long distance; the only difference you notice is how much you pay! DEREGULATION- RELATIONSHIP STORY

9. DESIGNER CLOTHING I have a friend who goes to the mall and buys Ralph Lauren polo shirts for $75.00… for ONE shirt! Me? I go to the outlet stores and buy four Ralph Lauren polo shirts for the same amount of money. What's the difference? Nothing, except I get four shirts for what she pays for one and they're the same thing! I get more for less! The same concept holds true for natural gas; it is all the same. The only difference you notice is how much you pay for it! DEREGULATION- RELATIONSHIP STORY

10. Create your own Relationship Story! STOP AND THINK… Pair up with a partner and create a relationship story What is Deregulation?What does Deregulation mean to you?