2009Annual ReportAnnual Report

Focused on Value and Benefit for Members Focused on Value and Benefit for Members Focused on Gas Solutions for Customers .

ESC Leadership 2009

Executive Committee

Gary Rehm Joe Rende Susan Clinesmith Joe GordonGary RehmESC Board Chair

Atmos Energy

Joe RendeESC Board Vice Chair

National Grid

Susan ClinesmithEnbridge Gas Distribution

Joe GordonSouthern Natural Gas, An El Paso Company

Kevin McCrackinDTE Energy

Wally RumielUnion Gas

John SenkewiczPSE&G

Technology and Market Assessment Forum Leadershipgy p

Todd Gordon, ChairSouth Jersey Gas

Diane Murray, Vice ChairEnbridge Gas Distribution

Equipment Manufacturers Council Leadershipq p pMarc Grandbois

Schwank North AmericaEric Kessler

Clayton Industries

ESC Support Team

D id W i Ri h d Bilj ti E i B i W WillitDavid Weiss Executive Director

Richard BiljetinaIndustrial Markets

Eric Burgis Commercial & Residential

Markets

Warren WillitsCommunications &

Conference Coordination

Jennifer CoutoMeeting Planning &

Contract Administration

Kim HowardAccounting

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What is the ESC The Energy Solutions Center is an organization of energy utilities and equipment manufacturers that deliver improved, energy

efficient natural gas and hybrid solutions to residential, commercial, and industrial energy users

MissionBuilding Energy Value and Customer Loyalty with Innovative

Natural Gas Solutions

GoalsTrain and equip utility marketing and customer support staff to be more successful in delivering energy efficient gas solutions

to their customers

Id tif d t l ti th t i th Identify and promote new energy solutions that increase the competitiveness, productivity, reliability, and comfort of our

members’ customers

Develop more effective partnerships between utilities Develop more effective partnerships between utilities, customers, equipment manufacturers and vendors, and

architects and engineers

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Dear Members:

The past year has been one of incredible financial and economic challenge for our country, our

Report to the Membership

industry, and our customers. As the cover of this report depicts, energy utilities and equipment manufacturers are focusing on expense management and maximizing return-on-investment. We’re proud that the Energy Solutions Center (ESC) augments these efforts by providing utility and equipment manufacturer members with tools, resources, and initiatives that leverage the limited amount of funds that members can dedicate to marketing, sales, and customer service.

ESC offered utility members strategies for “Building Energy Value and Customer Loyalty with Innovative Natural Gas Solutions” (our mission statement). ESC and its members fostered the ability of residential, commercial, and industrial customers to use natural gas more wisely, and helped them recognize the longstanding environmental and efficiency benefits of utilizing natural gas throughout their homes and businesses.

As we look back at 2009 at the ESC, it was a year when the organization continued to strengthen the ability of utility members to achieve excellence in serving all customer segments. We continue to offer three Technology and Market Assessment Forums (TMAFs) – geographically dispersed to minimize travel for regional members – so that our membership can be the best trained and educated marketing and sales personnel in North America. More than 45 developers and manufacturers of new gas solutions presented their marketing strategies to our membership, with the expectation that our utility members would be anxious to bring new solutions and technologies to residential, commercial, and industrial customers. What was particularly gratifying was the continued strong participation of the membership at our TMAFs at a time when many associations experienced drastic declines in meeting revenue and attendance.

The member-driven, segment-focused ESC consortia offered members specialized tools and resources in addressing the needs of specific customer segments. Our Boiler Burner Consortium, Cooling Consortium, Commercial Buildings Consortium, and Residential Burner Tip Consortium continue to develop customer outreach materials that will enable customers to better understand how they can use natural gas to meet environmental and efficiency goals. Our Distributed Generation Consortium is managing a large demonstration of Combined Heat and Power equipment at a major food processing plant in Connecticut.

ESC’s National Accounts Consortium retained personnel that will launch meaningful partnerships between utility members and national account clients in the hospitality, food, healthcare, and retail sectors. The Industrial Energy Efficiency Consortium and the Residential/Commercial Efficiency Consortium completed development of web resources which highlight new gas equipment as well as strategies to achieve conservation goals. The Gas Foodservice Equipment Consortium participated in major food conferences this year to educate more restaurateurs about improving profits with natural gas cooking and heat.

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The Center’s utility members have increasingly asked the professional staff at ESC to be active in the role of engaging directly with their end-users. Thus, the ESC produces electronic and print magazines which continue to educate and influence industrial, commercial, and residential energy users. Also, requests by utility members for ESC workshops in their own backyard continued to be robust this past year. ESC offers a diverse series of workshops and seminars ranging from Natural Gas 101 to Vertical Subdivisions to Residential Strategies during a Weak Housing Market Affiliate members of theVertical Subdivisions to Residential Strategies during a Weak Housing Market. Affiliate members of the Center benefit by serving as instructors and speakers and developing more meaningful relationships with the utility marketing staff as well as the end-use customers.

As you have sharpened your focus on meeting your corporate and departmental goals and objectives, so has ESC sharpened its focus on delivering critical products and services that facilitate the day to day tasks of gas utility marketing and sales, key account, and conservation and efficiency staff.

We remain pleased with our overall financial condition We gained additional corporateWe remain pleased with our overall financial condition. We gained additional corporate memberships in 2009, a direct result of ESC demonstrating ‘best-in-class’ value that is recognized by its members. Continuing to focus on real-world solutions – ways that identify innovative tactics to retain and grow gas load during these difficult financial times – continue to drive the Center.

We want to thank all the members of the Energy Solutions Center for their never-ceasing support, participation, and promotion of ESC in 2009. It is a tremendous tribute to the organization to see such sustained and enthusiastic use and endorsement of our products and services. In addition, the dedicated staff of the Center deserve our deepest appreciation for continuing to steer the ship in a way thatstaff of the Center deserve our deepest appreciation for continuing to steer the ship in a way that maximizes the relevance of our organization and ensures that ESC membership is a great investment for its members. We have been delighted to work with “our family” this past year, and look forward to a productive 2010.

David Weiss Gary Rehm Joe RendeExecutive Director ESC Board Chair ESC Board Vice Chair

Atmos Energy National Grid

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How Does ESC Deliver Value?

ToolsToolsTechnology

TraininggPAGE 6

ESC Strengthens the Ability of Energy Utilities to Achieve Excellence in Serving All Customer Segments

Customer Communications – ESC’s Natural Living, Energy Solutions for Commercial Buildings, and Gas Technology magazines serve as primary customer communication

vehicles for many of our gas utility members. We are proud to announce that Natural Living won a 2009

Magnum Opus award for excellence in energy Magnum Opus award for excellence in energy publications! Our professionally-produced magazines,

both electronic and printed, offer utility members effective and yet inexpensive means to highlight successful

installations and applications of natural gas solutions that solve everyday problems. Our customer magazines save our

utility members thousands of hours of design, layout, and editing work achieving both workforce efficiency and cost

savings Residential commercial and industrial customers savings. Residential, commercial, and industrial customers value reading about how others improve productivity,

environmental quality, and efficiency through natural gas applications.

On-Site Customer Interaction – ESC identifies compelling opportunities for its members tovisit with residential, commercial and industrial customers. This on-site learningand training helps utility reps to bring real-life solutions to their own customers withsimilar challenges. We were pleased this past year to bring utilities, equipmentmanufacturers, and customers together at such venues as the Miller Brewing plant, the University of Utah cogen facility, Gills Onions processing plant, the natural gas vehicle infrastructure in Salt Lake City, a Harley Davidson manu-facturing plant, Superior Boiler Works facility, and the Great Wolf Lodge resort in Niagara Falls.

Highlighting Gas Applications for Home Use – ESC’s Residential Video Consortium formed early in 2009 after several months of discussion, and is creating a series of short videos appropriate for utility websites and tradeshow displays. These professionally-produced videos highlight the lifestyle aspects, the environmental and energy benefits of natural gas, and the myriad ways that natural gas appliances can bring comfort and reliability to America’s homeowners.

Customer Marketing Materials – ESC’s Commercial Buildings Customer Marketing Materials ESC s Commercial Buildings Consortium, Boiler Burner Consortium, and Cooling Consortium have produced a wide array of customer communications, case studies, marketing brochures, and calculators to enable your customers to make better energy decisions and to understand the positive impact they make when they choose natural gas. Materials are specifically designed, packaged, and customized to help our busy utility reps reach more customers with more guidance as easily and as inexpensively as possible. guidance as easily and as inexpensively as possible.

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Education and Training – More than 450 participants, mostly the Directors and Managers of Marketing and Sales; Key Accounts; Conservation and Efficiency; and Customer Outreach participated in our Technology & Market Assessment Forums held in Pasadena, California, Salt Lake City, Utah, and Niagara Falls. Despite budget constraints brought on by the recession, many member utilitiestook advantage of these unique sessions to identify new gas solutions for load retention and growth, and/or for energy efficiency and conservation. TMAFs remain the single most valued deliverable of the Center and serve as the major training and education events for our marketing and sales representatives. Dozens of new

equipment p presentations; case studies of successful customer efficiency projects; and insightful market assessments were offered to our membership.

. Local Workshops – Among the more important member benefits are the ESC workshops on gas solutions conducted throughout North America. ESC customizes workshops on virtually any energy topic and conducts them free of charge for members in their own service territories. Atlanta Gas Light, Atmos, Chesapeake Utilities, Nicor, National Grid, New Jersey Natural Gas, UGI, Puget Sound Energy, and Southwest Gas are just some of our utility members who took advantage of this ESC program

Engaging Gas Allies – ESC sought out several opportunities to meet and educate large groups of gas customers. ESC participated in the

members who took advantage of this ESC program.

g g p g p pHearth, Patio, and Barbecue Association national conference in Reno, Nevada. Our Residential Burner Tip Consortium exhibited at the conference to promote the value and create awareness of natural gas appliances

and outdoor amenities. Efforts were made to convince the nation’s specialty retailers to carry additional natural gas products, and to develop new relationships with equipment manufacturers and vendors. ESC’s Gas Foodservice Equipment Consortium

participated in the North American Association of Food Equipment

“Though our company participates in numerous associations and organizations, we continue to find exceptional value as a member of the Energy Solutions Center SoCal Gas’ energy efficiency major

p p q pManufacturers Meeting held in Orlando, Florida in February. ESC also

participated in the International Builders Show in Las Vegas and the American Public Gas Association Market Development Conference in Atlanta.

exceptional value as a member of the Energy Solutions Center. SoCal Gas energy efficiency, major commercial and industrial accounts, residential marketing, and emerging technology development and demonstration staff are all involved with the many high quality programs and initiatives ESC offers. ESC provides significant benefit in helping SoCal Gas provide better gas solutions to its customers.

Gillian WrightSouthern California Gas Company

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ESC Accelerates the Introduction and Deployment of New Gas Solutions that Improve Customer Productivity, Competitiveness, Reliability, Efficiency and Comfortand Comfort

Promoting New Gas Solutions – Middleby Marshall’s WOW Oven won ESC’s GFEN Blue Flame award for 2009. This faster cooking gas pizza oven lowers energy bills by30% giving natural gas a significant competitive advantage.Most products cook in 3-4 minutes, greatly expanding the productivity of the ovens, allowing restaurant owners to purchase one oven instead of two. The ovens go into“sleep mode” when not in use, providing the customerwith additional energy savings.

Overcoming Market/Institutional Barriers to Commercialization Overcoming Market/Institutional Barriers to Commercialization –ESC has worked with the developers of a new generation of gas heat pumps to accelerate the deployment of this exciting new gas solution. The website GasHeatPump.org highlights the engine-driven GEDACand Aisin gas-fired heat pumps, which will be marketed under the brand name NextAire™ by IntelliChoice Energy. The website also highlights Robur’s absorption driven heat pump as well.

be installing small scale desiccant systems in both residential and commercial facilities. The dehumidifiers dry the indoor air allowing for a more comfortable and healthier environment. Consequently, less air conditioning and energy are required to keep a facility or home cool. Natural gas is used in the

Facilitating Customer Acceptance of New Gas Equipment – Improvements to NovelAire’s desiccant dehumidifiers catalyzed a new ESC demonstration project. Laclede Gas in St. Louis will

dehumidification process.

“There‘s really no other place where our marketing, sales, and customer service staff can go to easily identify new gas solutions, tools, and resources to assist our customers. ESC is very focused on this. The timeliness and quality of ESC’s products and services make our annual membership in ESC one of our best investments.”

Dan RyanLaclede

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ESC Enables Energy Customers to Achieve Conservation, Efficiency, and Environmental Goals through the Use of Natural Gas

Use of New Tools to Bring ESC to the Members – This year, the ESC videotaped its first Technology and Market Assessment Forum and made it available to our membership that could not attend our Salt Lake or Niagara Falls TMAF due to budgetary and travel restrictions. The easy-to-view video files were enjoyed by more than a hundred ESC members. ESC launched its new webinar series to help members or their customers, wherever they are located, understand new gas optionsquickly and easily.

Partnering with Other Organizations – In an attempt to reduce redundancy and to further leverage members’ limited financial resources, ESC is working with the US DOE, EPA, American Gas Association, Southern Gas Association, American Public Gas Association, the Council for Responsible American Public Gas Association, the Council for Responsible Energy, Gas Technology Institute, Natural Gas Technologies Center, and other organizations that offer resources to the public about the environmental and efficiency attributes of natural gas use.

Energy Efficiency Website – In a joint effort between the Residential/Commercial Efficiency Consortium and the Industrial Energy Efficiency Consortium, NaturalGasEfficiency.org was launched. Thiswebsite provides information on both the benefits and cost savings of energy efficient practices. Segmented by market sector, the website assists member companies in identifying technologies, audit tools, calculators, incentives, rebates, and resources in support of energy efficiency programs. Case studies are collected and posted to allow easy dissemination of success stories. In addition, links are provided to learn more about energy efficiency programs at member companies.

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Equipment Demonstrations at Customer Locations – Throughits Distributed Generation Consortium, ESC is collecting data on aCHP system at a Frito-Lay plant in Killingly, CT. The CHP installa-tion, comprised of a 4.6 MW Solar Gas turbine and a Rentech heat recovery steam generator, was successfully commissioned in 2009.ESC, DOE, State of Connecticut, and Yankee Gas participated in a ribbon cutting ceremony at the plant in August to recognize Frito-Layand its corporate parent, Pepsi Cola, for its leadership in sustainablebusiness practices and carbon footprint reductions.

National Accounts – ESC national account relationship manager, Melanie Anthony, is implementing a strategic plan aimed at providing national account customers with natural gas technology solutions. Our goal is to develop a sustainable relationship with national account customers based on the awareness of their needs and future expansion plans. ESC invites national account customers to

participate in ourTMAF meetings. As a result of such participation, ESC has been able to work with national chains and our member companies onpromoting the deployment of more energy efficient gas equipment.

Recognizing Customers who Embrace Innovative Energy Solutions – In 2009, ESC recognized fifteenenergy users that deployed innovative energy solutions in partnership with their local gas utility. ESC was energy users that deployed innovative energy solutions in partnership with their local gas utility. ESC was proud to present its Partnership Award for Innovative Solutions to thefollowing utilities, end-users, equipment manufacturers, and engineers: Miller Brewing, Gills Onions, Ralph’s Grocery Stores, Southern California Gas Company, Bill Deaton Associates, Energy and Power Solutions, University of Utah, ATK Launch Systems, Jordan School District, P&E Auto-mation, Questar Gas, OxyVinyls, Great Wolf Lodge, Minto Development Group, Enbridge Gas, Reid’s Heritage Homes, Superior Boiler Works,GreenField Ethanol, and Union Gas.GreenField Ethanol, and Union Gas.

“Though budgets for marketing and sales continue to be squeezed, the pressure to provide quick and accurate guidance to our customers has never been greater. ESC’s resources and experienced staff contribute significantly to our ability to provide energy strategies and answers to our customers ESC contribute significantly to our ability to provide energy strategies and answers to our customers. ESC also provides a great opportunity to interact with so many different gas utilities, providing unparalleled professional networking opportunities for us.”

Hans GreenePGW

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2009 Center MembershipCorporate Members

AGL ResourcesAlagasco

2009 Center MembershipAffiliate Members

Advanced Mechanical TechnologyAO Smithg

Atmos EnergyAvistaCenterPoint EnergyChesapeake UtilitiesCitizens Gas and Coke UtilityCity of Richmond (Va.)CPS EnergyDominion Energy

Aisin World CorporationAmerican Gas AssociationArmstrong InternationalBig Ass FansBloom EngineeringBradford WhiteCapstoneClayton Boilers

DTE EnergyEnbridge Gas DistributionFlorida Public Gas GroupGaz MetroIntermountain GasLaclede Gas Manitoba HydroMissouri Gas EnergyMobile Gas

Cleaver BrooksCombustion and Energy SystemsECR InternationalEcoAlignEnershield IndustriesExhausto Inc.FMC Corp, Lithium DivisionGas Technology InstituteGreffen Systems Mobile Gas

Municipal Gas Authority of GeorgiaNational Fuel Gas Distribution National GridNew Jersey Natural GasNicor GasNorthwest Natural GasONEOKPhiladelphia Gas Works

Greffen Systems Hurst BoilerInsultechIntelliChoiceMetavanteMiura BoilersNatural Gas Technologies Center Natural Resources CanadaNovelAire TechnologiesPhiladelphia Gas Works

Piedmont Natural GasPSEGPuget Sound EnergyQuestar GasSouth Jersey GasSouthern California Gas CompanySouthern Natural GasSouthwest Gas Corporation

NovelAire TechnologiesNovitherm PrecisionTemp, Inc.Relms, Inc.Rheem ManufacturingRinnaiRoburSchwank Ltd.Sofame Technologies

Hal Snyder, Vice President for Customer Solutions – Southern California Gas Company and Ron Jibson President –

TECO Peoples Gas SystemThe Gas Company (Hawaii Gas)UGI UtilitiesUnion Gas Ltd.Vectren Washington GasYankee Gas

Solar TurbinesSuperior Boiler WorksTecogenTurbine Air Systems

Company and Ron Jibson, President –Questar Gas address the ESC membership during our 2009 TMAFs.

Consortia & Workgroups

Boiler Burner Gas Foodservice Equipment Network Outdoor RoomCommercial Buildings Industrial Energy Efficiency Renewable EnergyConstruction Heater National Accounts Residential Burner TipCooling Equipment & Markets Natural Gas Vehicles Residential & Commercial Energy EfficiencyDistributed Generation Oil Conversion Residential Video

Energy Solutions Center Inc. | 400 North Capitol Street NW | Washington, DC 20001 | 202-824-7150