PROTECTING AND EDUCATING CONSUMERS

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PROTECTING AND EDUCATING CONSUMERS

• The Tennessee Regulatory Authority Presents
• Natural Gas Symposium
• August 19, 2003

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MAJOR COMPONENTS OF RATES

• PIPELINE DEMAND CHARGES
• COST OF NATURAL GAS
• LOCAL DISTRIBUTION CHARGE

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United Utilities Purchasing Group

• Share Pipeline Capacity
• Purchasing Power in Market Place
• Enhanced Relationship with Members
• Share Timely Information
• Individual Systems make own hedging decisions
• Maximize Capacity Release Revenue
• Manage own Storage

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Diversify Supply Sources

• 30 - Appalachian Region
• 37 - Gulf Coast Region
• 33 - Storage
• 100

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TOOLS AND ASSETS USED TO STABILIZE PRICE OF
NATURAL GAS

• 40 - Futures Contracts
• 33 - Storage
• 27 - Index

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LOCAL DISTRIBUTION CHARGE

• SAME SINCE NOVEMBER 1990
• IN APRIL 1992 JCCUD HAD ONE EMPLOYEE FOR EVERY
  119 CUSTOMERS
• IN 2003 JCCUD HAS ONE EMPLOYEE FOR EVERY 225
  CUSTOMERS
• DEDICATED EMPLOYEES
• UNITED UTILITIES PURCHASING GROUP

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JCCUD Natural Gas PurchasesJanuary 2001

• VOLUME
  COST PER DTH
  DTH
• 228,063 Futures 65
  4.8156
• 9,882 Index 3
  10.1047
• 111,484 Storage 32
  3.3717
  
  
• 349,429 TOTAL
  5.1572

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JCCUD Residential Rate January 2001

• 5.1572 Cost of Natural Gas
• 0.0108 East Tenn Transportation
• 0.1145 East Tenn Fuel Loss
• 0.0609 Tenn Transportation
• .0991 Tenn Fuel Loss
• 2.0800 Pipeline Demand Charges
• 1.8900 JCCUD Distribution Charge
• _______
• 9.4125 Cost per Million BTU

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Keep Customers Informed

• Communicated expected higher cost of natural gas
  through local newspapers and quarterly Utility
  Newsletter
• Reassured customers that we have adequate gas
  supply.
• Written our Congressman making him aware of the
  changes in the market place and asked for
  additional funds for low-income families.
• Provided employee handout sheet to enable them to
  answer customer questions
• During the winter of 2001 JCCUD Board of
  Commissioners reduced our local Distribution
  Charge by 10 for Residential Customers during
  the months of November, December and January
• Work Closely with Industrial Customers

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Customer Service Programs

• Encourage Budget Billing
• Encourage Pre Payments During Summer
• Encourage Needy Customers to Utilize Low Income
  Assistance Program
• Administer Keeping Warm Project
• Work with Customers on A Case by Case Basis in
  Making Arrangements for Payment
• Distributed JCCUD-Your Energy Partner Handout
  Which Provides COST SAVING TIPS FOR STAYING WARM
  THIS WINTER

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Public Gas Systems Have Serious Concerns

• U S Needs a Balanced Energy Policy
• Continued High Natural Gas Prices Will Lead to
  Energy Intensive Industrials Moving Outside The
  US At The Expense of American Jobs
• Continued High Prices is Harmful to the consumer
  and Dangerous to the US Economy

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Suggestions

• Provide Relevant and Timely Natural Gas Supply
  Data to the Marketplace
• Limit Our Countrys Over-Reliance on Natural Gas
  as the Fuel for New Electric Generation
• Enhance The Supply of Natural Gas by Drilling in
  Environmentally Sensitive Fashion on Federal
  Lands and Waters
• Encourage Appliance Energy Efficiency Rulemakings
  That Will Result in Greater Energy Savings (
  Based on The Total Fuel Cycle) With Lower
  Emissions