UGI ENERGY SERVICES, INC.

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1 UGI ENERGY SERVICES, INC. Peter Terranova Vice President, Midstream Assets & Services May 13, 2011

2 UGI Corporation UGI Corporation Propane Majority interest in AmeriGas (largest domestic retail propane supplier, ~1 billion gallons annually) International propane retailer: France, Austria, Czech Republic, Slovakia, Poland, Hungary and China. Energy Marketing and Services UGI Energy Services, Inc. Major Regional Energy Marketer & Midstream Operator 120 Bcf Annual Sales Operate on 33 LDCs in the Northeast and Mid-Atlantic regions Midstream Assets UGI LNG UGI Storage UGID electric generation Gas & Electric Utilities Natural Gas Division: Largest natural gas distributor in Pennsylvania 150 Bcf Annual Throughput 563,000 customers served Electric Division: Northeastern PA 2,150 miles of transmission & distribution lines 62,000 customers served

3 UGI Energy Services Overview UGI Energy Services Retail Sales Power Generation Pipeline & Storage Assets Peak Shaving Assets Propane Storage Assets 120 Bcf annual gas sales 16.2 million gallons annual liquids sales 890 Gwh annual electric sales 250 MW generation capacity 237,000 Dth/day leased pipeline capacity 15 Bcf owned storage 6 Bcf leased storage 55,000 Dth/day LNG deliverability 93,000 Dth/day propane-air deliverability 150,000 Dth/day LNG deliverability under construction 5 million gallons storage 1.3 million gallons rail car storage capacity 3

4 UGIES Footprint 30+ utilities served Annual Sales 120 BCF 8,000+ customers Peak day 400,000 Dth

5 UGI Opportunities UGI PA Gas Assets 11,900 miles of pipelines Six propane-air peak shaving plants 1.25 Bcf LNG peak shaving plant 15 Bcf of underground gas storage

6 Value of Market Proximity EIA Wellhead vs PA City Gate $16 $14 $12 Well PA City Gate Spread $/Dth $10 $8 $6 $4 $2 $0 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11

7 Pipeline Capacity Costs-UGI Utilities Quantity (Dth/day) Annual Demand Costs UGI 345,000 $61MM PNG 93,000 $14MM CPG 47,000 $7MM Total 485,000 ~$100MM *Annual demand (rent) cost can be invested in pipelines (equity) to transport Marcellus directly to the Utilities

8 Value of Diversity BASIS PRICE TO UGI UTILITIES $0.90 $0.80 TGP CPG TETCO UGI TCO UGI Transco PNG $0.70 $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 $0.00 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11

9 UGI Energy Services Midstream Strategies Lead the way in developing Marcellus gas to preserve and improve the environmental and economic health of our core geography Grow natural gas use for the benefit of the local and regional environment and the economy Integrate existing UGI Energy Services and UGI Utilities assets and markets for efficient and beneficial local access to Marcellus gas Be a leader in providing responsible gas producers efficient access to broader interstate markets to assure sustainable Marcellus operations

10 UGI as a HUB-Potential Supply Outcomes To Canada Rockies Express Marcellus Shale Appalachian Supply UGI HUB

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12 Project is being jointly developed by UGIES and NiSource Gas Transmission & Storage 125 miles of 30 pipeline 500,000 Mcf/D of capacity Goal is to provide a supply header from which producers and markets have multiple options to transact around Future expansion plans

13 Producer and Shipper Benefits Additional access to major markets New York Boston Philadelphia Baltimore Washington D.C. Provide greater value to your purchaser by utilizing the daily/monthly operational flexibility offered by multiple market delivery options Optimize the header to maximize profits by following the dynamics of market pricing Ability to respond quickly to market fluctuations such as weather and outages Access to storage services Direct access to UGI Utilities natural gas distribution network

14 PENNSTAR Interconnects Columbia Gas Transmission Texas Eastern Transmission Transcontinental Gas Pipeline Tennessee Gas Pipeline Dominion Transmission Millennium Pipeline UGI s Meeker & Tioga Storage Fields 15 bcf

15 Auburn Lateral

16 Auburn Lateral Conversion of existing distribution infrastructure to gathering service Installation of 5,500 hp compressor station to deliver production into Tennessee Gas Pipeline Capacity up to 120,000 Dth/day June 2011 in-service date Future expansion plans

17 UGI Storage Company

18 UGI Storage Company 15 BCF of storage in Tioga, Potter and Cameron counties Approved Market Based Rates effective 4/1/2011 Injection from Tennessee (Wellsboro meter) Withdrawal into CPG distribution system or Dominion In discussions with Tennessee to add compression for withdrawal capabilities In discussions with Empire to interconnect with their line in Tioga County (access to Millenium) Likely interconnect this summer with Marcellus producers Reviewing opportunities to expand

19 CHP-Microturbines CHP create two forms of energy: electricity and heat The heat output of MicroTurbines can be used to both heat and air condition MicroTurbines operate connected to a utility grid or stand alone MicroTurbines cleanly burn waste gases Microturbines operate in conjunction with onboard battery packs on transit buses and cars

20 Successful CHP Installations Essential Items Heat Recovery Key to shorter paybacks Key to 80% + Efficiency of units No heat recovery drops efficiency to 30% Run Time: 24 x 7 x 365 Maximizes Operating Savings Shortens Paybacks Must be coupled with 100% heat recovery

21 Organic Growth Opportunities-UGI Utilities Roughly 130,000 natural gas customers with electric water heaters. Roughly 50,000 gas customers do not have gas heating. An estimated 500,000 homes and businesses near our mains do not have gas service (primarily oil). Perception of oil is unfavorable; electric rate caps off. On UGI Utilities alone, roughly 50,000 households who switched from oil to natural gas in the 10 years prior to 2006, saved nearly $430 million from

22 UGI Business Relationships We provide the safest possible workplace for our employees, with our contractors, and in the communities in which we operate We implement state-of-the-art environmental protection across our operations; We continuously improve our practices and seek transparency in our operations; We strive to attract and retain a talented and engaged local workforce; We are committed to being responsible members of the communities in which we work; We encourage spirited public dialogue and fact-based education about responsible shale gas development; and We conduct our business in a manner that will provide sustainable and broad-based economic and energysecurity benefits for all.