TRANSWESTERN PIPELINE COMPANY, LLC 2014 RATE CASE UPDATE / OVERVIEW - PowerPoint PPT Presentation

TRANSWESTERN PIPELINE COMPANY, LLC 2014 RATE CASE UPDATE / OVERVIEW Phoenix, AZ | September 16, 2014

AGENDA • Introductions • Past Settlements • 2014 Rate Case Filing • Gas Plant, Cost of Service, & Tariff Rates • Tariff Changes – Rate Schedules – General Terms and Conditions • Discussion Points

PAST SETTLEMENTS RP06-614 • Last Filed Rate Proceeding • $193.5M Settlement (Cost of Service) • RP11-2576 • “ Pre- Settlement” Filing • No Change in Transportation Rates • Fuel Reductions • Requirement to File a Rate Proceeding on October 1, 2014 • - Fuel Tracker - Reservation Charge Crediting - Roll-In of Phoenix Expansion

2014 RATE CASE FILING Key Dates • File on October 1, 2014 – Per Settlement in RP11-2576-000 • Anticipate Suspension to April 1, 2015 • Base Period: June 2013 – May 2014 • Adjustment Period: June 2014 – February 2015 • Anticipated FERC Process • FERC Order Suspending Rates • Administrative Conference • Rolling Discovery • FERC Staff Top Sheets • Settlement or Hearing •

BASIS OF RATE CASE FILING Cost of Service • Allocation of General / Common Costs Based on Plant, • O&M, Miles of Pipe, and Usage Units Maintain Existing Depreciation Rates • Roll-In of Phoenix Expansion and New River • Compression Expansion in Rates

BASIS OF RATE CASE FILING (CONTINUED) Rate Design • Utilizes Adjusted Straight Fixed Variable Cost • Allocation/Rate Design – 5% of Return and Taxes Allocated to Usage Rate Continue West of Thoreau / East of Thoreau / San • Juan / Phoenix Rate Derivation / Boundaries

GAS PLANT RP06-614-000 RP15-XX-000 As Filed As Filed Total Gas Plant ($MM): $ 1,156.2 $ 2,322.7

COST OF SERVICE RP06-614-000 RP15-XX-000 As Filed ($MM) As Filed ($MM) Total Operating Expenses $ 58.3 $ 53.3 Depreciation Expense 19.4 32.0 Taxes Other Than Income 12.3 18.2 Return 81.6 178.0 Federal / State Income Taxes 39.3 58.3 Revenue Credits (0.1) 0.0 Total $ 210.8 $ 339.8 Settlement $ 193.5

RATE COMPARISON Current RP15-XX-000 Rate Area Rates As Filed West of Thoreau (California) Reservation - Daily 22.59 ¢ 62.53 ¢ Usage 0.89 ¢ 2.52 ¢ 100% LF 23.48 ¢ 65.05 ¢ West of Thoreau (East of California) Reservation - Daily 19.09 ¢ 52.84 ¢ Usage 0.89 ¢ 2.52 ¢ 100% LF 19.98 ¢ 55.36 ¢ San Juan Reservation - Daily 14.00 ¢ 30.44 ¢ Usage 0.22 ¢ 0.96 ¢ 100% LF 14.22 ¢ 31.40 ¢ East of Thoreau Reservation - Daily 15.00 ¢ 31.11 ¢ Usage 1.18 ¢ 2.16 ¢ 100% LF 16.18 ¢ 33.27 ¢ Phoenix Reservation - Daily 69.73 ¢ 90.85 ¢ Usage 0.00 ¢ 6.76 ¢ 100% LF 69.73 ¢ 97.61 ¢

RATE COMPARISON (SAN JUAN TO CALIFORNIA PATH) Firm Current RP15-XX-000 Rate Schedules Rates As Filed FTS-1, FTS-4, & LFT Reservation 36.59 ¢ 92.97 ¢ Usage 1.11 ¢ 3.48 ¢ 100% LF 37.70 ¢ 96.45 ¢ FTS-2 Usage 23.82 ¢ 46.81 ¢ FTS-3 Reservation N/A 139.46 ¢ Usage N/A 3.48 ¢ 100% LF N/A 142.94 ¢ FTS-5 (San Juan to Phoenix Path) Reservation 102.82 ¢ 174.13 ¢ Usage 1.11 ¢ 10.24 ¢ 100% LF 103.93 ¢ 184.37 ¢

RATE COMPARISON Interruptible Current RP15-XX-000 Rate Schedules Rates As Filed PNR Usage 39.66 ¢ 98.32 ¢ ITS-1 Usage 37.70 ¢ 96.45 ¢ ITS-2 (San Juan to Phoenix Path) Usage 103.93 ¢ 184.37 ¢ HPS Usage N/A 97.61 ¢

RATE COMPARISON Transportation Rates Current RP15-XX-000 (100% LF) Rates As Filed SJ – CAL 37.70 ¢ 96.45 ¢ SJ – Phoenix 103.93 ¢ 184.37 ¢ EOT – CAL 39.66 ¢ 98.32 ¢ EOT – Phoenix 105.89 ¢ 186.24 ¢ SJ – EOT 30.40 ¢ 64.67 ¢ EOT – EOT 16.18 ¢ 33.27 ¢

TARIFF CHANGES • Existing Rate Schedules • Uniform Hourly Flow Clarification in Rate Schedules FTS-1, FTS-2, FTS-4, LFT and ITS -1 • FTS-1 Delivery Available Down the Phoenix Lateral • FTS-1 Usage Charge and Fuel Not Applicable for Deliveries to a Logical Point within a Specific Pooling Area • Eliminate FTS-4 Rate Schedule Effective May 1, 2015 • FTS-5 Modifications • New Firm FTS-3 Service • Provides 150% Hourly Rights of Shippers Scheduled Quantities • New Hourly Peaking Service (HPS) • Interruptible Service is offered to Delivery Point Operators • Hourly Swing Capabilities, subject to Available Capacity

TARIFF CHANGES (CONTINUED) • General Terms and Conditions • Add Reservation Charge Crediting Provisions per Settlement and Update Scheduling Priorities

TARIFF CHANGES (CONTINUED) • Reservation Charge Crediting • Tariff Months Eliminated • Non-Force Majeure - Seven Day Average • Force Majeure - Ten Day Grace Period - Seven Day Average • Credits Based on Primary Firm Physical Receipts / Deliveries

TARIFF CHANGES (CONTINUED) Scheduling Priorities Current Proposed 1. Primary and Alternate paths 1. Physical Primary receipt to Primary delivery on a pro rata basis at a location within the 2. Primary receipt (logical pool) to Primary delivery on a pro rata primary path on a pro rata basis basis 3. Inside the Primary path from Alternate receipts to Primary 2. Alternate paths at a deliveries by price location outside the primary 4. Inside the Primary path from physical Primary receipts to path on a pro rata basis Alternate deliveries by price 3. Interruptible and Overrun 5. Inside the Primary path from logical Primary receipts to gas by price Alternate deliveries by price 6. Inside the Primary path from Alternate receipts to Alternate deliveries by price 7. Outside the Primary path from Alternate receipts to Primary deliveries by price 8. Outside the Primary path from physical Primary receipts to Alternate deliveries by price 9. Outside the Primary path from logical Primary receipts to Alternate deliveries by price 10. Outside the Primary path from Alternate receipts to Alternate deliveries by price 11. Interruptible and Overrun gas by price

TARIFF CHANGES (CONTINUED) • General Terms and Conditions • Add Fuel Tracker and Balancing Reconciliation Provisions per Settlement • File Fixed Fuel Rates in the Alternative to Fuel Tracker

GENERAL TERMS & CONDITIONS • Fuel Tracker • Filed biannually effective each April 1st and November 1st • Two Components - Fuel Reimbursement Percentage - Fuel Reimbursement Surcharge • Collects Fuel Used, LAUF, Electric Costs & Company Use Fuel • Balancing Tools Flow Through • Annual Cash Out for the Twelve Months ended September 30th • Balancing Tools Included: - Operational Purchases/Sales - OBA Imbalance Resolutions - Unauthorized Gas - Penalty Amounts

TARIFF CHANGES (CONTINUED) Alert Day Changes • • Low Line Pack now Overage Alert Day • High Line Pack now Underage Alert Day • Next Day Alert Days Called Prior to the Beginning of the Upcoming Gas Day • Same Day Alert Days Effective Immediately • Alert Day Penalty Charges Updated to Reflect Market Conditions • Line Pack No Longer Posted • Enhanced OFO Provisions

TARIFF CHANGES (CONTINUED) • Other Minor Tariff Changes • Gas Quality • Measurement • Creditworthiness • Contracting • Unauthorized Gas

QUESTIONS & DISCUSSION Contact Information: Gregg E. Russell (713) 989-2510 Gregg.Russell@energytransfer.com Michael T. Langston (713) 989-7610 Michael.Langston@energytransfer.com Thank you for your time.