HRM CouncilEnvironment & Sustainability Standing

Committee

July 7, 2011

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

Benefits of Natural GasNatural Gas:

Aligns with environmental sustainability policiesReduces GHG and particulate emissionsEnhances energy securityAvoids risk potential of oil leaksProvides competitive advantage for business attraction & retentionReduces energy costs

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

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

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

Economic Benefits to HRMIn 2010, Heritage Gas customers saved over $30 million, savings of 35-60% over oil25 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 HRMFostering ongoing positive relationships between HRM and Heritage Gas at all levelsSupporting the connection of HRM facilities to the natural gas systemSupporting 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 processcost of pavement impact chargesproposed depth of cover increasesHRM By Design rules

Conclusion

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