Special Called Board Meeting

Authorization of new Portfolio III Bonds

June 9, 2011

Overview of Gas Authority debt - attached

Results of bond pricing

Board action – Authorize staff to accept

proposed pricing and finalize issuance on bonds

Agenda

June 9, 2011Special Called Board Meeting - 2 -

Components of Gas Authority Liabilities

Total Liabilities – Audited Balance Sheet at 12/31/10 $ 3,219,000,000

Less: Main Street Prepayments – Limited-recourse debt - $ 2,481,000,000

FV of Derivatives, A/P and Due to Members - $ 446,000,000

Net Portfolio III debt and other obligations $ 292,000,000

All ownership interests in oil and gas reserves including interests owned through participation in Public Gas Partners

Storage inventory and seasonal working capital

Other miscellaneous gas supplies (e.g. landfill prepayment, etc.)

June 9, 2011Special Called Board Meeting - 3 -

Rationale for Issuance of new Bonds

Portfolio III debt is comprised of 2 commercial bank lines of credit for MGAG and 3 lines for PGP Pool 3

2 series of short-term Notes with one maturing every 6 months, and

2 issues of 10-year amortizing bonds, 1 each by MGAG and PGP

Issuance of new Gas Authority Bonds

Reduces reliance on bank lines of credit and market access for additional Short-term Notes Reduces total line of credit borrowings by $40 million and ST Notes by $10 million

Takes advantage of current historically low interest rate environment Converts variable rate obligations to fixed rates over 5-year term

Maintains reasonable cash-flow flexibility over estimated lives of gas reserves Intermediate term allows for repayment or refinancing as required by future project

development and net cash flows

Utilizes Gas Authority’s higher credit rating minimizing project interest costs

June 9, 2011Special Called Board Meeting - 4 -

MGAG/PGP Debt Summary

Current Balance

Balance with 5-Yr Bonds

Change

Gas Authority:

Series F 10-yr bonds

88,885,000 88,885,000 0

Series J 1-yr notes 67,000,000 57,000,000 -10,000,000

Series K 1-yr notes 60,000,000 60,000,000 0

Series L/M/N 5-yr bonds 0 50,000,000 50,000,000

Lines of Credit * 20,000,000 5,000,000 -15,000,000

Total 235,885,000 260,885,000 25,000,000

Public Gas Partners:

Series A ** 10-yr bonds

122,000,000 122,000,000 0

Lines of Credit 42,000,000 17,000,000 -25,000,000

Total 164,000,000 139,000,000 -25,000,000

Total – All debt * 399,885,000 399,885,000 0* Available working capital may be utilized in lieu of lines of credit in order to minimize project interest costs** Balance outstanding includes unamortized premium

June 9, 2011Special Called Board Meeting - 5 -

(In $ millions) MGAG Total Current Comments Fixed /Pool 1 Pool 2 Pool 3 Total rates Variable ?

Available capacity 0.25% Current 7-day LiborLines of credit - unfunded Liquidity for ST Notes 19 19 37 13 50 0.40% Reducing Wells Fargo commitment to $50 M F Liquidity for Ops & Capex 10 10 20 25 45 0.42% JPM - renewed $50 M commitment F PGP LOCs - liquidity 58 58 58 0.60% Increased capacity after $25 M repaid FTotal available 29 29 58 115 38 153

Short-term debtMGAG LOC - Wells Fargo 0 0 0 1.75% Reduced by $20 M w/ cash and bond proceeds VMGAG LOC - JPM 0 5 5 1.25% New 2 1/2 yr commitment through Dec 13 VAdvance Payment to PGP 22 1 23 -23 0 1.35% Reduced by $15 M, Funded w/ excess cash VPGP LOCs - Wells/JP/Scotia 17 17 17 1.75% Funded amounts reduced by $25 M VMGAG ST Notes - Advance Refunding -10 -10 -10 -0.60% $10 M will be retired in Nov 11MGAG Short-Term tax-exempt notes 47 47 94 33 127 1.00% VTotal short-term debt 69 38 17 124 15 139

Long Term Debt:New MGAG 5-yr bonds - tax-exempt 20 20 40 40 2.00% Expected all-in interest cost FNew MGAG 5-yr bonds - taxable 5 5 10 10 2.50% Expected all-in interest cost FMGAG Taxable 10-yr bonds 45 9 54 35 89 5.30% FPGP Tax-Exempt Bonds 122 122 122 3.20% FTotal long-term debt 167 34 25 226 35 261

0Total Debt - MGAG 114 72 25 178 50 228Total Debt - PGP 122 0 17 139 0 139Total Debt - MGAG and PGP 236 72 42 350 50 400

Percent tax-exempt 72% 79% 48% 73% 66% 72%Long-term as % of total funded debt 71% 47% 60% 65% 70% 65% Much higher % long-term, committed fundingWtd avg interest rate 3.04% 2.31% 2.79% 2.86% 4.19% 3.02% for Pools 2 and 3MGAG Participation Share 142 50 29 221 50 271 3.09%

Public Gas Partners

June 9, 2011Special Called Board Meeting - 6 -

Changes to Portfolio III Debt