East Tennessee Natural Gas 2009 Customer Meeting Pat

East Tennessee Natural Gas 2009 Customer Meeting Pat Gibson Vice President, East Tennessee Natural Gas September 2, 2009

Agenda • Introduction • Spectra Energy Highlights • Market Fundamentals • Business Development Update • System Operations • Marketing Update • LINK Enhancements • Q&A East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 1

Spectra Energy Highlights Pat Gibson Vice President, East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009

Spectra Energy Asset Portfolio One of the Largest Midstream Systems in North America 2008 Natural Gas Pipeline Throughput Tcf Miles of Transmission Pipe Miles of Gathering Pipe Miles of Distribution Pipe Storage Capacity Retail Customers East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 3

System Overview • 1. 5 Bcf/d capacity • 1, 500 miles of pipe • Diverse market: Marketers, Producers, Electric Generation, Utilities, Industrial • Access to diverse and reliable supply sources – Major pipeline interconnections – On-system Appalachian suppliers – On-system LNG storage - ~1. 1 Bcf working gas – On-system Storage - 5. 5 Bcf East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 4

East Tennessee Natural Gas Projects In-service Greenway Nora 48 MDth/d capacity In-Service 12/2008 Patriot Uprate 40 Mdth/d In-Service 12/2008 Equitable-Glade Springs 50 MDth/d capacity In-Service 10/2008 Supply source East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 • Driven by the need for Appalachian producers to economically deliver Appalachian production to liquid markets (i. e. Transco. Cascade Creek) – Patriot Uprate • Creates capacity from Jewell Ridge to Cascade Creek • Uprates MAOP on 146 miles of 12” & 24” pipelines – Greenway Nora • Extends mainline path from Jewell Ridge back to Nora Lateral with deliveries to Cascade Creek • Replaces 6 miles of 8” pipeline with 24” – Equitable-Glade Spring • Install one 7, 600 HP electric compressor unit • Creates capacity from Nora/Jewell Ridge to 5 Cascade Creek

Our Charter • We know we are successful when we are the: • Supplier of choice for our customers • Employer of choice for individuals • Advisor of choice on policy and regulation for governments and regulators • Partner of choice for our communities • Investment opportunity of choice for investors East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 6

Natural Gas – The Natural Choice • Naturally Clean • Naturally Abundant • Naturally Reliable • Naturally Versatile • Naturally Efficient • Natural Gas is Safe • Natural Gas is Needed • Natural Gas is Now East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 7

Market Fundamentals Erika Young Project Director East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009

Spectra Energy North America Asset Map with Basins and Shale Plays Traditional Natural Gas Resources 1, 673. 4 Tcf Coalbed Gas Resources Total U. S. Resources Proved Reserves (EIA) 163. 0 Tcf 1, 836. 4 Tcf 237. 7 Tcf* Future U. S. Natural Gas Supply Data source: Potential Gas 2, 074. 1 Tcf • Committeeyear-end 2007 (mean values) Value as of (2009) TCF/year East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 Data source: ICF International July 2009 Compass 9

Abundant Domestic Supply Potential Source: ICF International July 2009 Compass East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 10

North America Regional Gas Demand (Bcf/d) East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 Source: ICF International July 2009 Compass 11

Where Will Supply Be Sourced? § North America consumes ~ 70 Bcf/d Indicative New Production Price Stack $ § Existing production declines at 20% 30% a year § 14 -20 Bcf/d per year of new production is required to replace annual decline Associat ed Gas Shale s Other Unconventio nal Onshore Conventio nal Offshore Convention al Bcf/d/y Assumes breakeven prices in low to high $3 s. § New supply is sufficient to make LNG a A myriad of factors drive each producers’ decision: price-taker § Capital access § Acreage rights § Ultimate resource base § Price of liquids § Capacity positions § LNG § Access to infrastructure § Saturated conventional gas vs drier shale gas § International vs. domestic players No two producers are the same Shales will help to fill supply gaps and to meet demand growth largely driven by gas-fired electric generation. East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 12

Business Development Update Bill Wickman Director Marketing East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009

Appalachian Shale and CBM Marcellus Shale Devonian Shale Huron, New Albany Shale Chattanooga Shale Coal Bed Methane East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 14

ETNG Supply - Past 05 0. 65 M M dt h/ d d h/ dt M M dt 4. 0 M M d h/ 0 East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 15

ETNG Supply - Present 0. 22 0. 1 M M dt h /d TG P + 1. TE 9 M TL M P+ dt h/ CG d T th/d 0. 02 MMdth/d Md 9 M 0. 03 0. 40 04 0. M M d h/ dt East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 16

ETNG Supply - Future East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 17

Current State of Capacity • ETNG – Capacity from the “West End” is limited • No capacity from TGP • Capacity from TETLP only short term (through Dec-09) • Some capacity from SNG – Long-term capacity from the “East End (3300 Line)” to western delivery points is not available. Short-term winter capacity is available. – Nora Lateral remains fully subscribed – Limited capacity still exists on Jewell Ridge Lateral and on Stone Mountain Line – Limited Capacity exists from Saltville/Jewell Ridge to Cascade Creek (Transco) • Saltville Storage - Some capacity exists East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 18

Business Development Initiatives • Continue expanding ETNG system to meet emerging market needs • Explore and develop opportunities to enhance ETNG access to Appalachian Supply • Incorporate existing customer growth needs into new expansion projects. East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 19

Northeast Tennessee Project (NET) • Overview –Adds 150, 000 Dth/d of firm capacity –Creates mainline capacity from Jewell Ridge to Flatwoods Compressor Station 3306 –Extends ETNG system 8. 5 miles from Flatwoods to a proposed power plant in Hawkins County –Enhances market reach from growing Appalachian supply basin • Schedule East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 – 7/1/2009 completed open season – 8/4/2009 completed reverse open season –March 2010 file FERC Certificate application –February 2011 commence construction –September 2011 in-service 20

Summer 2009 Spectra Energy Operations Review Ryan James Director Capacity Services East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009

East Tennessee Natural Gas Top 25 Delivery Days 2/4 1/16 1/20 3/2 1/15 2/5 1/21 3/3 11/21 11/18 2/3 2/23 1/14 East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 1/17 22

East Tennessee Natural Gas Top 25 Summer Delivery Days 7/14 6/24 East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 7/15 6/23 7/16 7/30 6/25 23

Seasonal Peak Demand East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 24

Total Seasonal Deliveries East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 25

Cascade Creek Deliveries East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 26

Daily Receipt Profile (Excluding Storage) East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 27

Receipts from TGP East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 28

Outages • Rural Retreat Outage Sept 21 -27 • Glade Spring Outage Oct 5 -12 • Estill Springs to Ooltewah ILI Runs: Sept 9 and 16 • Estill Springs to Ooltewah DOT Investigations: Beginning Oct 16 • Bristol ILI Runs: August 25 and 27 • Bristol ILI DOT Investigations: Beginning October 3 • Ooltewah to 3500 ILI Run: Sept 1 and 2 • Ooltewah ILI Investigations: Beginning October East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 29 26

Winter Imbalances + Due Pipe - Due Shipper East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 30

Winter Imbalances – MAD* Not Implemented + Due Pipe - Due Shipper East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 *Maximum Allowed Deliveries 31

Winter Imbalances – MAD Implemented + Due Pipe - Due Shipper East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 32

Winter Imbalances – Adjusted MAD with TGP OFO + Due Pipe - Due Shipper W 06 -07 Adj MAD East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 33

Imbalances • ETNG has minimal linepack to absorb any overtakes or undertakes on its system. • ETNG relies on upstream interconnecting pipelines to help manage any imbalances. • Flexibility of upstream interconnects will continue to be limited during times of constraints on their systems. – Anticipate upstream interconnect flexibility will be limited during peak and near peak periods similar to previous few years. – Limitations may also occur during outages and low demand periods. East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 34

New ETNG Service Options George Snyder Director ETNG Marketing East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009

Potential Service Options • Enhance Storage Delivery Option • Creation of No Notice Service • TETLP upstream capacity East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 36

System Operational Changes • System growth • Evolving customer contract mix • Expiration of FTC Agreement Containing Consent Order – Potential tariff changes East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 37

Imbalance Management Tools • Current Tariff Based Tools – MAD (LMSMA Agreement): • LMSMA OBA’s tied to MDDO and scheduled usage • SDO: swing on storage attached to system • Limited to select peak days – SSO: upstream storage on TGP • Operational Tools – Line Pack: • Limited capability • System integrity put at risk to support overtakes – Upstream OBA • Dependent on upstream pipes’ capability • Subjects customers to “cascading OFO’s” • Not currently utilized • Customers can opt in or out so it has narrow application – Force Balance Letters: Due shipper imbalance East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 38

Potential Service Options Considerations • Enhance Storage Delivery Option – Year round – Not solely dependent on MAD • Creation of No Notice Service – New No Notice rate schedule on ETNG – Supported by upstream capacity on TETLP and Moss Bluff or Egan storage • TETLP capacity – Alternate upstream capacity – Leverage recent expansions (Kosciusko, etc. ) East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 39

Benefits of Potential Service Options • Higher priority imbalance management service • Preservation of flexibility • Supply diversity • Available in 2011/2012 East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 40

Next Steps • One on one customer meetings • Assess opportunity for a new service • Refine scope and structure of new service or enhancements East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 41

East Tennessee LINK® Update Michael Wolf Commercial Business Analyst LINK® Systems East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009

LINK® Support Team Leader Jeff Pekar Production Support Trish Meigs Sandra Bryant Adriel Cervantes Blanca Rivera Joyce Schubrick Michael Wolf • The LINK® System is continually being enhanced to reflect changing business requirements, customer needs, and advancements in technology, with many of our enhancements prompted by our customers. • LINK® Group support personnel average over 19 years of industry experience. This provides a unique ability to understand address customer needs. • All of our application designers and developers are located on-site which allows quicker turnaround time and higher quality. • LINK® Group personnel are involved in all enhancements from inception to implementation and are also responsible for conducting LINK® Training, ensuring they are in constant contact with our customers and are attuned to their needs Project Team Elias Macal Eugene Brennan Joe Casey Robert Gardner Claude Mundy Michael Wolf East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 43

Customer Service Application Enhancements There have been 37 meaningful customer enhancements implemented since 2007. The following are just a few of the enhancements that have been implemented since the Fall 2008 Shipper meeting: – Nomination Customization – Cross Pipeline Nomination – Password Self-Service – Activity Roll – ETNG Default Time – BA Level Nominations – Graphical ETR Maps – Graphical Capacity East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 Release 44

Customer Service Application Enhancements The following enhancements are planned for the remainder of 2009: – – – – Auto-Confirmation improvements Package ID Confirmation LINK® Mobile Priority Modeling Auto-Renomination Report Subscription Know Your Account Manager (Phase II) East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 45

Customer Service Application Enhancements Potential enhancements already identified for 2010 include: – Automated Validation/Approval of Retro-Active Adjustments – Graphical Nomination Priority Communication and Modeling – Additional Capacity Release/ETR Map Enhancements – Cross Pipeline Nomination Enhancements – Ad Hoc Reporting – Projected Allocations/Imbalances What enhancements – Automatic Activity Roll do you recommend for – Entity Level Confirmations 2010? East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 46

LINK® Business Strategy • Consistent with Spectra Energy’s goal of becoming the “Supplier of Choice” in the Natural Gas Industry, the LINK® Group is dedicated to ensuring the LINK® System is the leading Customer Interface System in the Industry and that our customer service levels exceed management and customer expectations. • To achieve these goals, we focus on: – Identifying and implementing system enhancements that benefit customers. – Integrating customer feedback into system design, quality control and service. – Promptly addressing customer issues/concerns. – Maintaining quality measures. – Providing customer training at geographically diverse sites. – Implementing changes that increase internal efficiency and reduce costs. – Continually enhancing the technical and business expertise of East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 internal staffing. 47

Quality Improvement Efforts Continue • Quality measures are tracked and evaluated. • Project Managers are challenged to find 95% of all project defects. • Employee incentive goals are keyed to quality. • Overall defects reduced 22% over last year. Does your experience with LINK® coincide with our tracking statistics? East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 48

Business Continuity/Disaster Recovery • Business Continuity/Disaster Recovery plans are in place and routinely tested. • We have a redundant LINK® site located in Austin, Texas. • In the event of a major operational, environmental, or other crisis situation, a secondary site for LINK® staff is located in Nashville. Hurricane Ike Recovery in Nashville East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 49

Training • This year, East Tennessee focused training was provided in Nashville during the week of June 15. • Attendance was low. • Do we need to change our offerings, locations or frequency? • Should we consider any of the following? – Provide East Tennessee focused training every other year unless there are major system/business changes. – Provide training every year in Nashville, but include Texas Eastern, East Tennessee and Southeast Supply Header in the same week? East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 50

How are we doing? What can we do better? http: //link. spectraenergy. com/enhancements/sugg estion. asp East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 51

LINK® Model Demo East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 52

Q&A East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 53

East Tennessee Natural Gas 2009 Customer Meeting | September 2, 2009 54