Kern River Gas Transmission Company. Customer Meetings 2018

Transcription

1 Kern River Gas Transmission Company Customer Meetings

2 Exceptional Businesses and Assets 11.6 million customers worldwide Top-rated service provider within the industry 22,700 employees worldwide Exceptional safety and work environment 39% energy generation renewable and noncarbon Customer rates below national average $90b of total assets 33,500 miles of electricity transmission lines 16,400 miles of natural gas pipeline 30,000 MW owned generation 2017 net income $2.87b 2

3 Kern River System Based in Salt Lake City, UT 1,717-mile pipeline system, of which 1,300 miles are 36 diameter steel pipe 384,220 compressor horsepower 2.17 Bcf/day design capacity Access to Rocky Mountain basins and Elk Hills supply via 20 receipt meter stations Access to markets in Utah, Nevada and California via 73 delivery meter stations 3

4 Kern River Supply Flow Options Wyoming 5.0 Bcf/d Kern River customers have access to abundant and cost competitive supplies Rockies, Canadian, Permian, and San Juan supplies access premium markets in southern Nevada and southern California Salt Lake City Salt Lake City Goshen 0.6 Bcf/d Freemont Peak receipt point allows access to PG&E system supplies Wheeler Ridge and Kramer Junction allows access to SoCal system supplies 17Z Oxy receipt point provides access to Elk Hills supply Oxy 17Z 0.2 Bcf/d Los Angeles Fremont Peak 0.3 Bcf/d Las Vegas Dag Moj 0.4 Bcf/d 4

5 Kern River Advantages Provides a variety of transportation services Delivers highly reliable service Provides exceptional customer service Financially supported by Berkshire Hathaway to maintain the integrity of its pipeline system and to expand based on the needs of its customers Completed Projects Physical security installed at all compressor stations, select meter stations and valve sites Security data from field locations transmitted 24/7 to Kern River s gas control center Hardware and software upgrades Numerous computer applications updated and/or re-written Infrastructure (firewalls and switches) updated 5

6 Kern River System Operations Wholly-owned system is looped except thru Las Vegas Gas can flow down one pipeline when the other is out of service Gas control Staffed 24/7 Off-site back-up if needed during emergencies SCADA All facilities remotely monitored/controlled from gas control Real-time modeling Monitors system efficiency Predictive capabilities Integrated with SCADA System 6

7 Kern River System Received 27% of Rockies natural gas supply in 2017 Delivered 26% of California s 2016 demand for natural gas 1/ Is the primary source of natural gas for southern Nevada Scheduled throughput averaged 105% of design capacity in 2017 (same in / ) Average Scheduled Volume (Dth/day) 3,000,000 2,500,000 2,000,000 1,500,000 1,000, , Avg Daily Sched Design 1/ 2017 California Gas Report, California Gas and Electric Utilities 2/ January 1, 2018 through February 18,

8 2018 Customer Commitment To be the best energy company in serving our customers, while delivering sustainable energy solutions What does this mean? You will get what we promise accurately and on time Mutually beneficial relationships based on our core principles, not quarter over quarter profits We will share the purpose behind our actions No surprises either way Frank, candid discussions We will commit to making it easy to do business with us We will negotiate and perform in good faith We will continue to invest in the pipeline in order to provide you highly reliable service and to meet your future growth needs Seek balanced outcomes Do necessary due-diligence, but maintain an attitude of partnership 8

9 Customer Satisfaction 2018 Mastio Survey Results #1 in Regional Pipeline Group for past 10 years Placed #2 out of 37 Interstate Pipelines (#2 of 36 pipelines in 2017) 2018 vs overall score: vs (1.15 increase) Scores increased in 25 of 29 attributes We will continue to work with you to identify actions to address your concerns 9

10 Customer Satisfaction 2018 Mastio Survey Results No. Attribute st Edition nd Edition Difference 11 Effectiveness of contract negotiations (0.30) 27 Competitive rates and discounts (0.04) 29 How likely would you be to recommend this company to a friend or colleague? (0.03) 6 Representatives who listen well (0.03) 18 Accurate operational information is readily available Pipeline staff provides prompt & accurate responses to questions, requests and issues Representatives understand the needs and challenges of your business Accuracy of gas metering systems Expertise of the representatives to help solve your business needs Solution creativity & innovation Independent of costs, how would you rate each pipeline on overall performance? Effectiveness of the pipeline's system for nominating, confirming & scheduling Effectiveness of pipeline's capacity release and contract systems and procedures Accuracy of invoices Firm gas transportation is highly reliable Scheduled gas volumes are accurate Value received for the money paid to the pipeline Communicates in an honest & forthright manner Representatives are accessible when needed Effectiveness of pipeline's system training (i.e. their proprietary EBB) Management of pipeline initiated restrictions Effective after hours support Flexibility of physical gas flow delivery Financial stability Quality of pipeline initiated communications Flexibility of gas pooling & aggregation services Ample access to diverse supply and/or markets Flexible transport options (hourly vs. monthly firm) Access to available storage

11 Customer Comments What we can do better Inability to understand our business needs and poor communication More consistency in managing the pipeline Switching of staff Access to storage Customer Satisfaction 2018 Mastio Survey Results Restrictions on flexibility within the pipeline due to Aliso Canyon issues Provide more operating data to allow shippers to be proactive when scheduling, to avoid OFOs 11

12 Customer Satisfaction 2018 Mastio Survey Results Customer Comments What we re doing well Their honesty in explaining rationale for pricing contracts beyond existing period They are always accessible Accommodating and informative when asked for help with using nomination system Very stable company with the right attitude to respond to system changes They are very knowledgeable and easy to reach, they understand our business 12

13 2018 Customer Satisfaction Improvement Initiatives Rates and Contract Negotiations Continue pricing turnback and operational capacity based on market conditions Seek creative ways to structure deals in the current narrow spread environment Representatives Cross-train existing employees and train new employees Use 3-way communication to ensure Kern River understands your needs & challenges Customer inquiries receive a response within 8 hours Communication Monitor NAESB Version 3.1 and update customers after FERC approval Continue to update customers on Kern River operations, line pack, balancing conditions, weather and 3 rd party system information Flexibility Manage daily imbalances to ensure transportation services are not jeopardized Allow intra-day flexibility to the extent possible 13

14 2018 Customer Satisfaction Improvement Initiatives Transportation Services Firm Reservation/Volumetric Fixed/Indexed Short-term/Long-term Interruptible Peaking Pooling Park and Loan Rapids Integrate index-based pricing into transportation sales and invoicing systems Improve and automate the sales and contracting processes Enhance filtering in measurement window Follow-up discussions During the year ensure action items are still relative and ultimately resolved per customer expectations 14

15 2018 Customer Satisfaction Improvement Initiatives Quick Links New Category on the DOR Website Maps Rapids Setup Notices Currently Effective Rates Fuel Matrix Rapids Tips & Tricks (Training) Export-Import-Copy Nominations FERC Order 809 Scheduling Timelines NAESB 3.0 Capacity Release Timelines Agreement Request Tutorial Park & Loan Cut Notification Maximize Your Noms Export-Import-Copy Confirmations FERC Order 809 EPSQ Calculations Pooling-Title Transfer Tracking Tutorial Capacity Release System Overview Historical Fuel Rates Netting & Trading Imbalances Instructions for Use of Rapids on an ipad 15

16 2018 Customer Satisfaction Improvement Initiatives Pooling / Title Transfer Tracking on Kern River Kern River offers pooling service to any party with a valid pooling agreement number Pooling agreement numbers are used to aggregate supply into associated receipt pools and disaggregate supply out of associated delivery pools. Pooling agreement numbers are used to nominate transfers within receipt pools and delivery pools. Transportation agreements must be used to transport out of the receipt pools and into the delivery pools. Fuel will NOT be charged to pooling/title transfer tracking agreement numbers. Kern River has two pool types: Interruptible (IT) and Firm (FT). Separate pools have been created based on customer requests to be able to determine whether the pool gas is Firm or Interruptible capacity. 16

17 2018 Customer Satisfaction Improvement Initiatives Daily Operational Report (DOR) website ~ Real-time line pack by segments now available ~ Interactive pipeline system map coming soon 17

18 2018 Customer Satisfaction Improvement Initiatives 18

19 Pipeline System Management Critical Line Pack Events Line Pack Level Low High Several notices may have been posted for each critical line pack event Kern River has not issued a scheduling or imbalance penalty since the pipeline was placed into service (February 1992) We must continue to work together to avoid impacts to transportation services and extreme high and low line pack conditions 19

20 Firm Transportation RESERVATION/DEMAND RATES Original Period 2 Alternate Insulated Non-Insulated Period 2 Rolled-In Service Period 1 10-yr 15-yr 10-yr 15-yr 25-yr 2002 Exp 10-yr $ N/A $ N/A N/A $ Orig Sys/2002 Exp 15-yr $ $ $ $ $ $ Alternate Original Period 2 Period 2 Incremental Service Period 1 10-yr 15-yr 25-yr N/A 2003/2010 Exp 10-yr $ $ $ $ /2010 Exp 15-yr $ $ $ $ All rates are non-leap year rates. 20

21 Competitive Rates to Southern California* Source: Platts M2MS Modeled Natural Gas Curves, 120-Month Daily Assessments dated May 22, 2018 *Kern River is also the lowest cost option to Southern Nevada 21

22 Kern River Supply (Dth per day) WYOMING Interstate Pipelines Northwest Pipeline 327, , , , , , ,558 Colorado Interstate 35,736 53,067 46,983 58,327 54,885 48,919 62,021 Overland Trail ,435 4,043 Roberson Creek (Dominion Overthrust) 107, , , , , , ,967 Overthrust 121 (Dominion Overthrust) 22,346 33,637 20,507 25,906 68,976 58,245 39,651 Hams Fork (Questar Overthrust) 161, , , , , , ,117 Gas Processing Plants Opal (Williams Field Services) 345, , , , , , ,954 Carter Creek (Hilcorp Energy) 60 12,636 18,081 16, , Painter (Merit Energy) 36,498 28,522 27,068 32,441 45,238 42,583 57,107 Pioneer (Enterprise Products) 510, , , , , , ,553 Rendezvous (Blacks Fork) 353, , , , , , ,802 Storage Whitney Canyon (Ryckman) 8,738 16,242 20, ,167 3,182 Clear Creek (QEP Field Services) 7 3,648 6,311 3,083 5,602 7,541 6,161 UTAH Interstate Pipelines Goshen (Dominion Questar Pipeline) 264, , , , , , ,026 CALIFORNIA Gas Processing Plants CA Resources Elk Hills 31,365 50,501 49,246 50,376 55,416 47,868 57,462 TOTAL SUPPLY 2,205,948 2,281,484 2,400,388 2,468,127 2,335,870 2,430,292 2,590,114 22

23 Kern River Market (Dth per day) CALIFORNIA LDC (SoCal Gas / PG&E) 907, , , , , ,792 1,024,981 Industrial (Primarily EOR) 497, , , , , , ,270 Power Generation 137, , , , , , ,162 Commercial & Pipelines 1,147 3,922 2,693 1,969 9,233 15,983 13,152 Total California 1,542,920 1,563,423 1,632,163 1,708,300 1,682,729 1,704,321 1,884,565 NEVADA LDC (Southwest Gas) 218, , , , , , ,265 Power Generation (NV Energy / LADWP) 299, , , , , , ,546 Total Nevada 518, , , , , , ,811 UTAH LDC (Questar Gas) 88,937 93,295 94, , , , ,162 Industrial (North Salt Lake Refineries) 12,997 11,522 11,285 14,225 12,986 13,194 11,429 Other Pipelines Power Generation (West Valley) 3,129 3,818 3, ,211 14,309 10,556 Total Utah 105, , , , , , ,611 TOTAL MARKET 2,166,191 2,264,823 2,374,729 2,439,826 2,327,523 2,419,013 2,590,987 23

24 Market Dynamics Kern River de-contracting California pipeline s maintenance California storage and new regulations Renewables Hydro-electric generation Deliveries to Mexico LNG exports Growing production / shifting pipeline paths Coal and nuclear power plant retirements 24