Draft Resource Reports 1-10 of Excelerate Energy L.P. under PF12-4.

Exhibit No. TIG-9 Docket No. RP16-___-000 Exhibit No. TIG-9 Page 1 of 20 A Periodic Update on Innovative Rate Designs June 2012 INFRASTRUCTURE COST RECOVERY UPDATE In 2007, when AGA published its first report on infrastructure cost recovery methods, 15 natural gas utilities in 11 states serving 8 million residential natural gas customers were using inno- vative rate structures that allowed them to modify tariffs and recover the costs of investments in utility replacement incurred between rate cases. Since that time, the use of these advanced regulatory mechanisms has tripled. Today, 47 utilities in 22 states serving 24 million residential natural gas customers are using full or limited special rate mechanisms to recover their replace- ment infrastructure investments, and 5 utilities have mechanisms pending in another state and the District of Columbia. Ten states have enacted legislation or issued generic regulations that give utilities in three additional states the authority to implement these mechanisms. A further 14 utilities in 7 states are recovering these investments using rate stabilized tariffs. Together, these regulatory programs are helping natural gas utilities maintain safe and reliable service to more than 30 million of the nations 65 million residential natural gas customers. STATES WITH INFRASTRUCTURE COST RECOVERY RATE MECHANISMS Docket No. RP16-___-000 Exhibit No. TIG-9 Page 2 of 20 THE CHALLENGES OF INFRASTRUCTURE COST RECOVERY Under traditional cost of service based ratemaking, the costs of natural gas utility infrastructure investments are recovered after the investment is in the ground and the regulator has approved the costs in a rate case. This system produces a significant lag between when the dollars are spent for infrastructure replacement and when the company begins to recover these expenditures in rates. In addition, while investments made to serve new customers or to deliver additional volumes of gas generate additional revenue, expenditures made to refurbish or to replace aging infrastructure do not produce incremental revenue. Timely cost recovery of prudently incurred safety and reliability investments is of utmost importance to the financial stability of natural gas utilities. Because traditional ratemaking allows recovery of infrastructure investments only following approval in a rate case, there is often a multi-year delay before the recovery of such investments begins. Investments that are recovered long after they are incurred cause the utility to bear carrying costs without the opportunity to recover these prudent expenditures. Credit agencies criticize companies with lag in the recovery of their costs and assign a lower credit rating to such utilities that ultimately translates into ...