James H. DeGraffenreidt, Jr.

1

• James H. DeGraffenreidt, Jr.
• Chairman, The American Gas Association
• Chairman and CEO,
• WGL Holdings, Inc.

Natural Gas The Nations Energy Advantage
The New York Society of Security Analysts January
18, 2007 New York, New York
2
Growth vs. Efficiency
3
Changing Utility Structure

• Traditional Investors Giving Way to
  Non-Traditional
• Foreign Ownership Increasing
• Future Impact Yet to Be Determined

4
Global Warming
Percent of Public Saying Global Warming Is a
"Very Serious" Problem
80
x
Germany

France
70
U.K.
60
Canada
U.S.
50
40
Percent Response
30
20
10
0
1998
2000
2003
2005
Year
Source
GlobeScan
Presentation to G85 Legislators Forum, 6
December 2005
5
Natural Gas Customers 2000-2005 (000)
6
Natural Gas Use Per ResidentialCustomer Is
Declining
7
Residential Natural Gas Demand2000-2005
Source Energy Information Administration
8
Commercial Natural Gas Demand2000-2005
Source Energy Information Administration
9
Industrial Natural Gas Demand2000-2005
Source Energy Information Administration
10
Electric Power Natural Gas Demand2000-2005
Source Energy Information Administration
11
Diversity for Electricity Generation
Allow Power Generators More Options
12
Gas Consumption Could Grow By More Than 20 By
2020
Source Energy Information Administration
13
Supply Outlook
0.7
Expected Sources of U.S. Natural Gas Supply 2020
3.6
18.8
2.7
19
6.8
2.3
30.7 Quadrillion Btus
14
OCS Sale 181 Boundaries
15
Existing North American Import Capacity
Total Current Capacity 5.2 Bcfd Capacity Under
Construction 2.3 Bcfd
Bcfd
Sources FERC, US Coast Guard, LNG Express, WGI,
LNG Observer
16
World Proved Gas Reserves
Trillion cubic feet
Middle East 2546.0
Europe EuroAsia 2259.4
Africa 508.1
Asia Pacific 523.7
S. Central America 247.8
North America 263.3
Global Reserves 6,348 Tcf
Source BP Statistical Review 2006
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Continued Energy Efficiency Is Critical
Encourage increased efficiency and conservation
35
Projected Demand without Efficiency Gains
30
5 TCF
25
20
TCF
15
U.S. Demand Projection
10
5
0
2003
2010
2020
2025
2015
2010
Source National Petroleum Council
18
Helping Our Customers Lower Their Natural Gas
Bills
Educating customers about cost effective
conservation and energy management programs
Emphasizing the benefits of energy efficiency
measures and new, more efficient natural gas
appliances Offering a variety of flexible
billing plans designed to mitigate the volatility
of natural gas prices
19
Regulatory Strategies in a High Price Environment
Including Long-term Contracts
20
Producing Wells
Natural Gas Transportation System
Transmission Lines
Gathering Lines
Processing Plant
Compressor Stations
LNG or Propane/Air Plant
Underground Storage
City Gate (Regulators/Meters)
Large Volume Customer
Residential Customers
Regulator/Meter
Commercial Customers
Large Volume Customers
Distribution Mains (Lines)
21
Decoupling
22
Innovative Rate DesignGood For Investor/Customer

• Investor
• Promotes efficiency/conservation
• Protects cost recovery
• Reduces need for rate cases
• Reduces risk/cost of capital

• Customer
• Less natural gas used
• Lower monthly bills
• Lower utility costs passed on
• Lower capital costs passed on

23
Investor Profile
24
Attractive Investment
25
Growth of AGA Index (vs. SP 500 Dow Jones
Industrials)Since Dividend Tax Legislation
Enacted
26

• Utilities are not a place to invest in if you
  want to get rich, but theyre a pretty good place
  to invest if you want to stay rich.
• -- Warren Buffett

27

• James H. DeGraffenreidt, Jr.
• Chairman, The American Gas Association
• Chairman and CEO,
• WGL Holdings, Inc.

Natural Gas The Nations Energy Advantage
The New York Society of Security Analysts January
18, 2007 New York, New York
28

• David N. Parker
• President and CEO
• The American Gas Association

at the
The New York Society of Security Analysts January
18, 2007 New York, New York
Natural Gas The Nation's Energy Advantage