Champion Energy Services has grown into a leader in electric retail after beginning as Mpower and a

Transcription

1 About Us Champion Energy Services has grown into a leader in electric retail after beginning as Mpower and a collection of other retail providers with ihthe deregulation of the retail electricity i market in Texas in Through organic growth and targeted acquisitions, Champion is now a top twenty electricity retailer in the U.S., and ranks in the top five of those unaffiliated with a utility company. Champion s strength thd doesn t tjust come from the ability to sell electricity it and gain customers, but mostly through Champion s expertise to manage commodity risks, its affiliations with creditworthy counterparties, strength of upstream ownership and balance sheet. Champion is well capitalized and is owned by Crane Capital, which is owned and run by James R. Crane. Champion has added strength and stability through h a wholesale l supply and trade credit relationship lti with Eagle Energy Partners, a division i i of EDF Trading. With EDF (one of the world s largest utilities) as Champion s supply partner, Champion has unparalleled access to the market. O ti d t th f dit ll Ch i th bilit t dli i ti l ti t Our expertise and strength of credit allows Champion the ability to deliver innovative solutions to tackle today s energy challenges. Champion has a reputation for delivering a diverse range of products that fit the specific needs of its clients, which include some of the largest industrial consumers in the state; school districts, cities and counties, and numerous commercial and retail operations.

2 About Us What makes us special? Financial strength & stability History of steady growth and profitability Competitive pricing Diverse products and structures In depth knowledge of commodity markets World class billing and customer service The Champion management team consists of top professionals from all aspects of the energy business, including power and gas origination, gas and energy trading, asset management, scheduling, transportation and exchange, regulatory, customer enrollment, customer service and billing system development. Champion personnel are active participants in ERCOT, including membership and/or chairmanship of numerous committees and working groups. This extensive market experience and know how translates to better products and services for Champion clients. Champion currently operates in the Texas ERCOT and Illinois ComEd deregulated electricity markets.

3 About Us Corporate Structure Crane Capital Group, Inc. Holding Company Champion Energy Holdings, LLC EEI Agreement Supply Agreement Credit Facility Texas Operations Illinois Operations

4 Natural Gas In Texas, electricity costs are directly correlated with the price of natural gas. Electricity prices mirror changes in natural gas on a real time basis. This chart displays the dominant role of natural gas in Texas. This chart shows the historic trends in the natural gas market over the past 10 years. Although there are periods of peaks and valleys, the prevailing long term trend is toward higher prices. The relatively low cost of natural gas as fuel for generation has led to the construction of numerous natural gas fired power plants in recent years, leading to an acceleration of this price increase.

5 Natural Gas trends In the Summer of 08 there was a benefit in longer term agreements because natural gas deliveries beyond 12 months were at a significant discount to the prompt month. Currently, the 5 year strip below provides no discount in future deliveries. It is up to the customer s risk aversion for product selection and length of term. Forward NYMEX Natural Gas Prices (left) However, based on the current structure, longer termed agreements are still much lower than what we had seen months ago and will result in protection against rising costs. A snapshot of the natural gas futures market shows a significant discount for deliveries in the shorter terms as opposed to longer terms, known as contango. These discounts are based on factors such as lack of demand, excess supply and overall economic factors. Factors affecting natural gas: Inventories Weather hurricane, cold winter, shut in s Crude prices Seasonality Economy lack of demand /MMBtu NG $ Feb 09 Jul 09 Dec 09 May 10 Oct 10 Mar 11 FutureNatural Gas Prices Aug 11 Jan 12 J Jun 12 J Nov 12 Apr 13 Sep 13 Feb 14 Jul 14 Dec 14 May 15 2/22/2009 1/22/ /4/ /6/2008

6 Heat Rates A heat rate product fixes the $ conversion ratio of natural $ gas to $ $ electricity, however, the price $80.00 of natural gas floats. You $60.00 would choose a heat rate if $40.00 you feel natural gas prices will $20.00 $ fall in the future. What are heat rates doing now r Price ($/MWh) Powe Power Price Sensitivity to Changes in Heat Rate $14.00 $13.00 $12.00 $11.00 $10.00 $9.00 $8.00 $7.00 $6.00 Gas Price ($/MMBTU) Series1 7 HR Series2 8 HR Series3 9 HR Series4 10 HR

7 Products The most important factor to consider when deciding on the different products availableisrisk is tolerance. Fixed Is budget certainty a priority? Select a rate that does not change over the course of the term. MCPE historically cheaper than a fixed product but only for those who can weather spikes in electric rates during hot summers and maintenance seasons. Heat Rate A heat rate product fixes the conversion ratio of natural gas to electricity, however, the price of natural gas floats. You would choose a heat rate if you feel natural gas prices will fall in the future and want to take an active role in managing the cost of electricity. Custom a blend of fixed &MCPE;all in heat rates; energy only quotes, etc

8 Nodal In 2003, the Texas PUC mandated that the Electric Reliability Council of Texas (ERCOT) design a new system to increase efficiency i in the marketplace. Originally i scheduled d to begin in December 2008, the market launch of Nodal has been delayed and a new launch date will be determined soon. A design for a new nodal system will be implemented to replace the current zoning system that consists of the North, South, West and Coastal zones which currently dictate congestion and pricing. The new system will consist of more than 4,000 nodes recording grid information and allowing for a more accurate, efficient system for managing grid congestion and assigning prices.

9 started Getting the best for your customer Champion Energy. Obtaining usage Letter of Authorization (LOA) process Submitting usage to Champion details to include when requesting quotes. Pricing EZ C vs. custom Batch Pricing Credit over/under 1,000,000 kwh Contracting ti requesting refreshed pricing ii and whentocontract t t

10 Letter of Authorization LOA Obtaining usage In the Texas marketplace, CRs are allowed to request historical data from a Customer when they are not the REP of Record. This data is provided by the TDSP to the requesting CR with the most recent twelve (12) months of usage. In order to provide the data to the CR, the TDSP must have written authorization from the Customer to allow them to provide this proprietary information. The TDSP will provide the requested data electronically in an Excel format within three (3) Business Days of receipt of a valid Letter of Authorization (LOA). Interval Data Recorder (IDR meter) If the request is for a Premise with an Interval Data Recorder (IDR) meter, the requesting CR shall indicate whether summary billing, interval data or both summary billing and interval level data is required by checking the appropriate box. Microsoft Office rd Docum Microsoft Office cel Workshe A copy of the LOA has been included here for you to customize, as well as the contact list for the TDSP s in ERCOT.

11 Requesting quotes What to include Upon receipt of usage from the TDSP, submit the following Submit unaltered data to Start date Broker fee Date quote needed And d include any exceptions to our standard dterms 10% bandwidth, 16 day pay, meter read billing

12 Pricing EZC Pricing Immediate starts Small commercial deals from 100,000 to 300,000 kwh For on site use with our blank EZ C Contract (fixed or MCPE) Generic quotes are refreshed every morning (see below). These prices are based on term, load factor, and zone, and can be used with our EZ C Contract. The last two customer s bills are required for credit approval, and these bll bills must have no late fees or forward dbl balances to pass.

13 Pricing Custom Batch Pricing Future starts Commercial deals Customized Pricing Special products heat rates, all in heat rates, blocks, hybrids, etc. We individually id price these customers. Indicative custom batch prices are refreshed every morning on all active deals, and can be refreshed at any time throughout the day in order to get the mostaccurateprice reflecting any intraday naturalgas movement. In order to price up a larger deal with us please send all requests to pricing@championenergyservices.com

14 Credit Customers under 500,000 kwh: Include 2 consecutive months worth of clean bills when submitting contract for execution. Customers 500,000 to 10,000,000 kwh: Submit the company name and corporate address and we will utilize Dunn and Bradstreet (DNB) for a credit check. Customers over 10,000,000, kwh: D&B Credit Report and Company Financials Renewals: Up to 3,000,000 kwh account must be current with no more than 2 late fees in past 12 months. Over 3,000,000 kwh will require Dunn and Bradstreet (DNB) for a credit check.

15 Account Maintenance ADD/DELETE Request a Customer Change Form through pricing@championenergyservices.com Customer signs and returns the form to Champion Energy Within 3 business days the transaction will be submitted to ERCOT ASSIGNMENTS New owner will require credit check Old owner requires move out request via customer change form TIMEFRAMES Move In* 3 5 business days (new meter install 10 business days Priority Move In* same business day before 3 p.m. Out of Cycle Switch 3 5 business days Switch occurs on next meter read *permits required

16 Origination Team Rene Bueno April Junk Megan Culver Steven Carroll Brian Harrington Lynda Bui a lbui@championenergyservices.com Michael Whaley hl mwhaley@championenergyservices.com hl h

17 Notes