Setting Record Financial & Customer Satisfaction Results

Natural Gas Operations

For the second consecutive year, our natural gas utilities set an operating income record. Thanks to favorable weather, sustained execution of our rate design strategy and continued expense management, operating income for the year was $287 million, following up 2013's record high of $263 million.

Our energy services business contributed an additional $52 million in operating income last year, compared with $13 million in 2013. This increase was primarily a result of mark-to-market gains, asset optimization and strong basis differentials. In addition, we captured margins that resulted from extreme and sustained cold weather in early 2014.

In our natural gas utilities, we added nearly 36,000 natural gas distribution customers, primarily in Texas and Minnesota. We were particularly successful in penetrating the multi-family market in Texas and have secured contracts that will continue that momentum in 2015.

We achieved more than $37 million of incremental rate relief in 2014 by continuing to execute our rate strategies that allow timely recovery of our investments. In Minnesota, we finalized and implemented the 2013 rate filing. We also filed annual recovery mechanisms and implemented the related rate changes in our Southern states. These rate adjustments not only contributed to our 2014 earnings, but also will allow us to continue investing in our system to meet customer growth and improve safety and reliability.

We are investing heavily in modernizing our system to deliver safe and reliable natural gas to our customers now and in the future. In 2014, we made $525 million in utility capital investments, nearly $100 million more than the previous year and our largest such expenditure to date. To support customer growth and enhance pipeline modernization, we constructed nearly 1,000 miles of main lines and installed nearly 88,000 service lines. This includes replacing hundreds of miles of steel, bare steel, plastic and cast iron pipe as part of our ongoing improvement programs. Capital spending will remain high for the foreseeable future, as we modernize infrastructure and invest in tools and technology.

After a successful pilot, we are investing in state-of-the-art, drive-by leak surveying technology, which is a thousand times more sensitive than current techniques. This new leak surveyor has the ability to distinguish between odorized gas in our distribution system and naturally occurring methane and more accurately identifies a potential leak location. When combined with traditional tools, it enhances the safety of our system.

Additionally, we expanded deployment of drive-by meter reading in the six states in which we operate and will complete the project in 2015. This technology allows us to read gas meters more accurately and efficiently without entering customers’ yards, resulting in greater customer satisfaction.

We’re giving customers more choices and personalized services. In 2014, we launched an enhanced automated phone system and new online self-service tools. This year, we will introduce a new website, and in the future, we plan to make further enhancements in how customers receive and pay natural gas bills.

We achieved our highest customer satisfaction ratings in phone surveys immediately following live and automated interactions with our call centers. For the fourth consecutive year, we were ranked among the top three U.S. investor-owned utilities in the American Customer Satisfaction Index. We also achieved first-quartile rankings in both the Midwest and South regions in the 2014 J.D. Power and Associates gas utility residential customer satisfaction study.

  • Leading We are taking the lead in using advanced leak detection tools.
  • ConnectingWe’re increasing customer satisfaction by using predictive analytics to anticipate customers’ needs and offering more personalized automated phone and online self-service tools.
  • InvestingOur investment in drive-by meter reading allows us to increase efficiency and customer satisfaction.
  • GrowingWe’re growing our infrastructure, constructing new mains and service lines as part of $525 million in capital investments in 2014.
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"We are ensuring the safety and reliability of our system and building stronger connections with our customers by innovating beyond today. Our customers and the communities we serve are benefiting from our investments in advanced leak detection technology, pipeline replacement programs, automated meter reading and new self-service tools. For example, cutting-edge, highly sensitive surveying technology allows us to locate hard-to-find leaks with greater accuracy than before. And enhancements to our customer experience platforms are making it easier for our customers to do business with us and manage their accounts."

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Building Stronger Connections

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