1 How Does It Work 1. Compressor site on pipeline 4. Empty trailers return for refilling 2. Delivered in composite containers 3. Customer Off-Load Station Building in partnership with one of T Boone Pickens’ companies, Clean Energy Fuels Hexagon Lincoln TITAN trailer ready for delivery by hauling partner, J.P. Noonan Asphalt plant Operational Q2 2013 Dispatcher 24/7 NG Advantage’s Customers: Paper Industry NG Advantage’s Customers: Industrial NG Advantage’s Customers: Medical 14 Gov. Peter Shumlin & ex-Gov. Jim Douglas 15 LT. Gov. Phil Scott Lawrence Miller, Sec. of Economic Dev. 16 Hospitals Asphalt Plants Paper Mills SCADA tools for knowing ◦ when trailer is full ◦ when to start filling ◦ when to switch over to 2nd trailer Telemetry on trucks & compressors Telemetry to monitor customer site Video to monitor and help drivers Technology 17 $5MM per compressor station $500,000 trailers Fully filling trailers in heat and cold Routing trailers so they get to customers “just-intime” Fully emptying trailers Multiple sources of gas Relationship with trucking firm Logistics Expand Your Territory Pipeline and Gas Journal - March 2014 20 A 24 inch diameter pipeline extension costs $100,000.00 per inch-mile or $2,400,000.00 per mile. “Gas pipeline cost per inch-mile The cost of building natural gas pipeline(1) infrastructure varied between $30,000 and $100,000 per inchmile(2) from 1993 to 2007 (Figure 8), according to the study. Through 2004, increases in pipeline construction costs were generally modest. After 2004, however, costs began to escalate dramatically, nearly doubling previous levels by 2006. This was due, in part, to high world commodity prices, especially the price of steel. Costs have declined recently and the several year cost run-up is expected to only be temporary. Since all three cases have similar GDP assumptions, input costs are assumed to be the same in all cases. Construction costs are projected to decline through 2010. After 2010, costs resume a general upward pattern consistent with the pre-2004 cost trends, which are slightly less than the assumed future inflation rate of 2.5 percent per year. The study finds the cost of pipeline construction is divided roughly equally between materials, labor and miscellaneous. In 2007, materials costs accounted for over 35 percent of total costs, but have since declined. The miscellaneous category includes engineering, surveying, administration, and environmental costs. Costs for right-of-way account for 8 to 9 percent of total construction costs. This component has recently increased at a slightly faster rate than the other components. It is projected that the labor and right-of-way components will grow slightly faster than the other components, as skilled labor remains a premium commodity and pipeline permitting and siting continue to increase in complexity. The cost of materials is projected to increase at a rate slightly less than inflation and account for about 25 percent of total pipeline construction costs by 2030. In all cases, cumulative transmission pipeline expenditures are similar through 2012, but they diverge thereafter. Considering the time required for pipeline planning, permitting and construction, it will take a few years before policy shifts such as those assumed in the High Gas Growth Case and the Low Electric Growth Case affect natural gas infrastructure investment. Pre-2012 pipeline infrastructure projects are already in advanced planning or already under construction, so they are not likely to be affected much by policy changes.” • Pipeline extension planned for 3 years away • Keeps company viable until pipeline arrives • Customer will convert its burner/boiler now • Customer will be ready when pipeline arrives • Customer will have relationship with the LDC now • NG Advantage leaves when pipeline arrives 21 Together We can Serve a “Stranded” Cluster For a Lot Less LDC puts in assets: pipes, one access point & meter LDC sells interruptible contract to companies, installs meters at each facility LDC owns customers NG Advantage trucks CNG 24/7 Customers have political stake in future pipeline extension to save more $ When pipeline arrives Customers – no change but save more money LDC – bills as usual, conversions already done NG Advantage - leaves Together We Can Serve a Community for a Lot Less Community or center of town must have: ◦ Large anchor tenants ◦ Small businesses & residential ◦ Existing pipes or LDC can install (capital expenses better for rate of return) to each customer ◦ One point of entry and meter for NG Advantage ◦ Individual meters for each local customer Questions ◦ Will 20% add on apply to new customers like these? ◦ Will the PUC need to approve them paying a different rate than other customers? ◦ Source of backup fuel ? Maybe central heating plant Sign a huge facility or gather enough smaller ones ie: industrial park Install infrastructure Provide one point of entry to gas network or a heating plant Sell to all customers Train and convert all customers Petition for a new CNG rate class – NG Advantage’s cost built into distribution rate LDC invest in NG Advantage’s infrastructure, compressor station or trailer OEM NG Advantage If large enough, NG Advantage will: Build a compressor station or truck from an existing station Provide tractors and trailers Build Off-Loading Station at LDC’s point of entry location Sell to customers, let NG Advantage provide the delivery Back To The Future Montpelier, Rutland and St. Johnsbury, Vermont Pipes to each business and residence One access point for propane Delivered by train **** Today bio mass steam to each downtown business & State office buildings in Montpelier Burlington, VT (MGP) Methane to each residence and business Coal arrived by barge to gasification plant Municipal Propane Municipal Methane 27 How Does It Work 1. Compressor site on pipeline 4. Empty trailers return for refilling 2. Delivered in composite containers 3. Customer Off-Load Station NG Advantage LLC P.O. Box 817 Milton, VT 05468 www.NGadvantage.com 802 760.1167 Mary Evslin VP of Marketing 30