05/2007

Working Smart For You

• Access to multiple Midwest markets • Access to multiple supply sources • Access to Michigan & Ontario storage fields • Flexible services • Flexible pricing

3

Great Lakes Gas Transmission

• Interstate natural gas transmission system transporting gas for others • Headquartered in Troy, MI. near Detroit • $1.2 billion in assets • $272 million in revenue in 2006

4

Great Lakes Gas Transmission & the Midwest/Northeast Pipeline Grid 5

Great Lakes Gas Transmission Typical Peak Receipt/Deliveries Emerson

2.3 Bcf/d (R)

N Carlton

400 MMcf/d

Fortune Lake

900 MMcf/d

ANR Pipeline CMS Energy Northern Natural TransCanada PipeLines Union Gas Viking Gas Chippewa (CE)

225 MMcf/d

Farwell

650 MMcf/d (R)

St. Clair

1.6 Bcf/d

Belle River (MC)

225 MMcf/d (R)

6

Facilities

• 2,000-mile, 36” diameter pipeline system traverses Minnesota, Wisconsin, and Michigan – MAOP 974 psi • 14 compressor stations with combined 450,000 hp • Over 60 receipt and/or delivery points

7

Forwardhaul or Backhaul

• Forwardhaul: bringing Western Canada Sedimentary Basin gas to the Midwest and Ontario • Backhaul: supplying Manitoba, Minnesota, Wisconsin, and Michigan markets from Dawn or Chicago hubs – Currently no fuel charges

8

Interconnects

Interconnects directly with TransCanada, Northern Natural, ANR, as well as:

In Minnesota

• • • Minnesota Energy Resources City of Duluth, MN Otter Tail Power

In Wisconsin

• • NSP/Xcel Superior WL&P

In Michigan

• • • • • • • Bluewater Gas Storage Consumers Energy Detroit Edison (via SEMCO) MCV MichCon SEMCO WEPCo

9

Supply Options

• Western Canadian Sedimentary Basin – via TCPL at Emerson • Chicago hub supply – via ANR at Fortune Lake and Farwell • Dawn hub supply – via TCPL at St. Clair

10

Storage Access

• • • • Northern MI – 130 Bcf working gas Central MI – 289 Bcf working gas Southeast MI – 219 Bcf working gas Dawn, Ontario – 240 Bcf working gas

11

Eastern Zone Storage Access Great Lakes Delivery/ Receipt Point

Deward Farwell Farwell Chippewa ANR Storage ANR Pipeline MichCon

Storage Company

Consumers Energy Rattle Run Rattle Run Bluewater Gas Storage Bluewater Gas Storage Belle River Mills MichCon Belle River Mills DTE/Washington 10

Total Michigan Access # of Fields

4 10 1 15 1 1 4 2

Working Gas (Bcf)

56 193 40 130 3 27 124 65

638 Bcf Max. Field Deliverability (MMcf/d)

810 4,300 500 2,800 100 700 2,550 920 12.7 Bcf/d

12

Michigan Production

• • • • Production region Goose Creek & Jordan Valley – 100 MMcf/d metering capability – 105 Bcf production in 2006* Hudson Richfield *Michigan Public Service Commission. Annual gas production summary.

13

Services

• Great Lakes offers a full menu of transportation services – Standard FT Service (long-term, short-term, daily, intra-day) – Limited Firm – – Interruptible Seamless service (off system capacity) – Market Center services

14

FT & LFT Service

• • Firm service – – Provided every day, without interruption Short term service for as little as one day – – Secondary point flexibility Intra-day available Full MDQ over less than 24 hours

15

FT & LFT Service

• Limited Firm service – Available for a pre-determined number of days within a pre-determined time period (i.e., available 120 out of 151 days) – May be lower cost alternative firm service

16

Short Term Services

• Firm services offered daily – Daily and intra-day longhaul – Daily shorthaul • Short-term FT customers treated equal to long-term FT customers • Subject to auction process

17

Auction Procedures

• Auctions take place in GLConnect – Requires username and password • Bidders should have credit coverage for the term they are bidding – Or subject to pre-pay • All posted bids are binding

18

Auction Procedures

• Nearly all auctions are blind (closed) • Bidders can enter multiple bids under the same entity name – Total MDQ can’t exceed offered MDQ • Unsold auction capacity will be sold on a first-come, first served basis at the highest awarded bid rate – Until 2:00 p.m. CCT

19

Auction Timing

• • • Term services (monthly, seasonal, annual) – Posted for 25-49 hours, ending at 9:00 a.m. CCT Next-day offerings – Posted 8:00 a.m. – 9:00 a.m. CCT Intra-day offerings – – Posted 9:00 a.m. – 9:30 a.m. CCT on weekdays Posted 9:30 a.m. – 10:00 a.m. CCT on weekends and holidays

20

Segmentation

• Firm transporters can segment capacity within path to serve multiple markets • Forwardhaul and backhaul gas to a common delivery point or from a common receipt point – Increase receipt & delivery volumes with no reservation cost increase to maximum rate contracts

21

Emerson Segmentation Flexibility Fortune Lake EXAMPLE: 100 Mdth/d Emerson to St. Clair contract Total Emerson Receipt: Total Farwell Receipt: Total Fortune Lake Deliv: Total St. Clair Delivery: 100 Mdth/d 200 Mdth/d 200 Mdth/d 100 Mdth/d Farwell St. Clair 22

Capacity Release

• Firm shippers have the right to release capacity to qualified third parties – Full or partial MDQ – Segmented releases

23

Interruptible Service

• Less expensive than FT • Typically used for shorter paths and/or backhauls on a short-term basis • Not subject to the auction process

24

Seamless Service

• Contract with Great Lakes to/from points on other pipelines – Example: Chicago to Dawn service • Great Lakes acquires transportation on interconnecting pipeline • One rate, one nomination – Great Lakes does the rest

25

Market Center Services

• Parks and loans available (as system conditions permit) at all receipt and delivery points • Title transfers available at all receipt and delivery points – Currently no charge • Interruptible in nature

26

Cost Based Rates

• Three zone system – $0.12/dth to Carlton (Northern Natural) • Approximately 1.2% fuel – $0.20/dth to Fortune Lake (ANRPL) • Approximately 2.0% fuel – $0.35/dth to St. Clair (TransCanada) • Approximately 3.5% fuel

27

Transporter’s Use

• • 13 fuel segments Determined by the 15 th of each month Number of segments 1 2 3 4 5 6 7 12-month average* 0.30% 0.58% 0.85% 1.12% 1.39% 1.66% 1.93% Number of segments 8 9 10 11 12 13 * As of May. Actual fuel percentages posted on www.glgt.com

.

12-month average* 2.20% 2.47% 2.73% 2.99% 3.25% 3.47%

28

Progressive Pricing Policies

• Negotiated rate authority • Market sensitive rates on short term services – Posted daily as available – Discounts may apply to secondary points

29

Progressive Pricing Policies

• • • Rate ranges – Floor and ceiling capped rates Pricing certainty – Locking in price for longer term Seasonal firm service – Variable MDQ for seasonal needs

30

Working Smart For You

• Access to multiple Midwest markets • Access to multiple supply sources • Access to Michigan & Ontario storage fields • Flexible services • Flexible pricing

31