Vector Pipeline TM Vector Pipeline Commercial Products

TM Vector Pipeline

MPSC Meeting March 13, 2013

Overview TM Vector Pipeline

• Introduction • Vector System • Commercial Products • System Utilization • 2013 Operation Activities • Historical Highlights • Michigan Connections / Supply Hub • North American Gas Fundamentals • Discussion TM System Map Vector Pipeline TM Vector Pipeline Commercial Products

• Firm Services – FT-1 Firm Transportation – FT-H Hourly Firm Transportation – FT-L Limited Firm Transportation • Interruptible Services – IT-1 Interruptible Transportation – PALS-1 Park and Loan Service – TTS Title Transfer Service – MBA Management of Balancing Agreement

Competitive Tariff Rates to Michigan

TM Vector Pipeline Commodity Basis to Henry Hub (HH)

SW SE Chicago Michigan

Vector HH + $0.39

ANR HH + $0.41 + $0.02

Trunkline HH + $0.42 + $0.03

Panhandle HH + $0.46 + $0.07

• Based on Henry Hub Prices from 02/27/2013, one year starting April 2013 • Includes fuel based on one year average

TM Vector Pipeline

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

 In-service - December 1, 2000  Initial Delivery Rate – 250,000 Dth/D  Annual Deliveries – 257 MMDth  Five Original Shippers  New Interconnections • Washington 10 – DTE Storage • Crown Point – NIPSCO • La Porte – NIPSCO

TM Vector Pipeline

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

 Highland Compressor Station In-service  Capacity increase to 925 MDth/D (Annual Long haul)  New Interconnections • Wheeler – Crossroads • Crete – Crete Energy Plant • Jackson – Kinder Morgan Plant

TM Vector Pipeline

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

 New Interconnections • St. John – ANR Pipeline • Hartland – Consumers Energy • Ray – Consumers Energy

 Modify Dawn for Receipts

TM Vector Pipeline

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

 New Interconnections

• Guardian

• Bluewater

 First Customer Survey

TM Vector Pipeline

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

 New Interconnections

• Courtright – Union Gas

 First Engine Replacement

 First Expansion Open Season

 File for First Expansion

TM Vector Pipeline

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

 Smart Pig Inspection

TM  Implement QuickNom

TM Vector Pipeline

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

 Expansion In-service  Joliet Compressor Station  Washington Compressor Station  Capacity increase to 1,171 MDth/D (Annual Long haul)  2nd Expansion Open Season and Filing  Relocated Gas Control/Scheduling to Houston

TM Vector Pipeline

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

 New Interconnections

• Greenfield – Greenfield Energy Centre

• Sombra – Enbridge Gas Distribution

 New Dawn Filter/Separators Installed

TM Vector Pipeline

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

 2nd Expansion In-service

 Athens Compressor Station

 Springville & Highland Modifications

 Capacity increase to 1,275 MDth/D (Annual Long haul)

 Guardian Interconnect expanded to 800 MDth/D

TM Vector Pipeline

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

 Implemented current rates

 Reversed flow to Joilet for the first time

 4 Scheduled engine change outs

 Enhanced Tie-in/Lateral Inspections

TM Vector Pipeline Vector Deliveries 2,000,000

1,800,000 Athens

1,600,000 Joliet & Washington

1,400,000

1,200,000 Highland

1,000,000 Average Dth/Day Average 800,000

600,000

400,000

200,000

- Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Dec-00 Sep-01 Dec-01 Sep-02 Dec-02 Sep-03 Dec-03 Sep-04 Dec-04 Sep-05 Dec-05 Sep-06 Dec-06 Sep-07 Dec-07 Sep-08 Dec-08 Sep-09 Dec-09 Sep-10 Dec-10 Sep-11 Dec-11 Sep-12 Dec-12

Canada U.S. Long Haul Capacity TM Vector Pipeline 2013 Activities

• Engine Replacements – Washington – Spring 2013 – Two Units – Springville – Fall 2013 – One unit

• Internal Pipeline Inspection – Required every seven years – 42 inch mainline & 36 lease-line (DTE Gas) – Spring 2013

Vector

TM Vector Pipeline Michigan Supply Hub

Lake Huron WISCONSIN MICHIGAN

Lake Michigan Washington ONTARIO Highland Dawn (Union) Detroit

Chicago Athens Lake Erie Joliet Springville Vector

TM Vector Pipeline Expansion Capabilities

• Lake Huron Long Haul MICHIGAN • 105 MDth/d Incremental Capacity • 2 New Compressor Units • Lease Line Loop Lake Michigan Washington ONTARIO WISCONSIN Dawn (Union)

Highland Detroit

Chicago Athens Lake Erie

Springville

Joliet

• Short Haul ILLINOIS• 300 -800 MDth/d Incremental CapacityINDIANA • Lease Line Loop • Potential Compression Michigan Connections TM Vector Pipeline Sheridan Interconnection TM Vector Pipeline

Michigan Production

Up to 4.5 MMcf/d

March, 2013

Eliminates Flare Gas

Jackson Power Plant TM Vector Pipeline

550 MW Merchant Plant

Direct Connect

113,000 Dth/d Delivery Capacity

17 Mile Lateral Owned By Consumers Consumers Interconnections TM Vector Pipeline

Capacities Hartland: 202,000 Dth/d Ray: 282,800 Dth/d

Vector Benefits Deliveries into heart of SE MI. Reduces compression needs. By-passes Line 1200 restrictions. Segmentation allows for supply from Chicago or Dawn Hubs simultaneously.

DTE Gas Interconnections TM Vector Pipeline

Capacities Milford: 1,515,000 Dth/d Belle River: 1,515,000 Dth/d

Vector Benefits Deliveries into heart of SE MI. Deliveries directly into Belle River Storage Complex. Enhances B.R. to Milford Line. Segmentation allows for supply from Chicago or Dawn Hubs simultaneously.

Michigan Storage Connections TM Vector Pipeline

Consumers – Ray 57 Bcf – Direct (inc. base gas) 136 Bcf – Total System

DTE Storage – Wash. 10 90 Bcf

DTE Gas – Belle River 69 Bcf – Direct 137 Bcf – Total System

Bluewater – Lenox 36 Bcf

Note: Cyclable volumes except where noted. North American Fundamentals

TM Vector Pipeline Shale gas in the Northeast, South and WCSB account for most of North America supply growth

Cumulative Change from 2011 (Bcf/d)

North America 2015 – 3.6 2020 – 17.6 2025 – 28.1 WCSB 2015 – (1.0) 2020 – 2.5 Eastern Canada 2025 – 3.7 2015 – 0.1 2020 – (0.1) 2025 – (0.0)

Rockies West Coast 2015 – (0.0) Appalachia 2015 – (0.0) 2020 – 0.8 2015 – 3.9 2020 – 0.2 2025 – 1.6 2020 – 10.5 2025 – 0.4 MidCon 2015 – 0.6 2025 – 13.6 San Juan 2020 – 0.6 2015 – (0.4) 2025 – 1.4 Gulf Coast 2020 – (0.7) 2015 – 0.1 2025 – (0.6) 2020 – 2.5 Supply reductions 2025 – 5.6 shown in red Permian Offshore 2015 – 0.9 Source: Enbridge July 2012 View 2015 – (0.6) As Presented at Vector Customer Meeting 2020 – 1.8 2020 – (0.5) October 2012 2025 – 2.6 2025 – (0.2) North American Fundamentals

TM Vector Pipeline WCSB gas production will reverse its decline

WCSB Gas Production

18 Historical Projected 16

10 Bcf/d 8

0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: NEB, Enbridge As Presented at Vector Customer Meeting October 2012

North American Fundamentals Appalachian production will continue to grow rapidly TM Vector Pipeline and will largely drive NA market dynamics Appalachian Shale Production

Utica 10 Bcf/d) ( 8

0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Note: The Utica shale play is in the very early stages of development. Based on the Source: NEB, Enbridge growth experienced with the Marcellus play, the Utica production profile could be As Presented at Vector Customer substantially higher than shown. Meeting October, 2012

North American Fundamentals

TM Vector Pipeline Over the next five years, growing shale gas basins will displace flows from traditional basins

Change in flows between 2012 and 2017

WCSB

Rockies Appalachia

Mid Continent

Permian Gulf Coast Red = Decrease Blue = Increase

MX Source: Enbridge July 2012 View Exports LNG As Presented at Vector Customer Meeting Exports GoM October 2012 Offshore 29 North American Fundamentals

TM Vector Pipeline Vector’s Observations

• Continued Canadian supply into Chicago

• Continued Mid-Continent supply into Chicago

• Growth in Marcellus and Utica basins

• Marcellus back to Chicago via REX

• Need for Nexus Project

• Displacement of SE supply into Midwest

Benefit / Summary

TM Vector Pipeline

• Vector Supports Michigan • Corporate Office • Infrastructure • High pressure deliverability into SE MI • Promotes Michigan storage activity

• Competitive Rates • Access to multiple supply basins

• Reliable delivery into Michigan

Vector Contacts TM Vector Pipeline John Donaldson - President (734) 462- 0238 [email protected]

Belinda Friis – Chief Compliance Officer Roland Vandenbroeck – Mgr Acct / Finance (734) 462-7621 (734) 462-0239 [email protected] [email protected]

Matt Malinowski - Mgr Market Development Amy Bruhn - Mgr Transportation Services (734) 462-0236 (734) 462-0237 [email protected] [email protected]

David Bilyk - Mgr Operations / Engineering Corrie Towns – Senior Engineer (734) 462-0235 (734) 462-7619 [email protected] [email protected]

Bob Smith – Mgr Regulatory / Admin Lisa Steinman – Office Manager (734) 462-0234 (734) 462-0232 [email protected] [email protected]

Fax: (734) 462-0231 www.vector-pipeline.com TM Vector Pipeline