The following alternative supply management strategies are based upon existing regulated and non-regulated energy industry environments and can be implemented at any time without regulatory restriction or penalty:

Alternative A - COST STABILIZATION is a strategy designed to offer the consumer price stability and price certainty over a period of time.  This strategy is accomplished by locking into a "fixed" futures price for natural gas supply and transmission services across a future specified period (i.e. multi month or multi year contract) via a non-regulated energy supplier.  Cost stabilization is most applicable for consumers with a need or desire to:

• Limit the upside of per unit cost exposure (i.e. price cap)
• Forecast the cost of energy for a future period, and
• Budget the cost of energy for a future period.

Pros:

• Offers price stability and price certainty across a future period
• Allows for high accuracy in cost forecasting and budgeting

Cons:

• Cost benefit is highly dependent on market timing of price "lock." Buyer is exempt from both upward and downward market trends for term of contract
• Requires frequent monitoring of future market conditions for next price "lock" to insure against missed market opportunities
• Generally results in a higher service fee from energy provider to offset cash flow and collections risk born by future cost of unpaid energy supply and transmission service
• Does not allow for conversion to indexed, or variable price option within same contract period or term

Alternative B - COST AVERAGING is a strategy designed to offer the consumer a consistent average of the market yield on a day-to-day or month-to-month basis.  This strategy is accomplished by floating or "indexing" your price against the real-time or "spot" markets on an hourly, daily, or monthly settlement basis via a non-regulated energy supplier.  Cost averaging is most applicable for consumers with a need or desire to:

• Not be second-guessed on the timing of their purchase decision,
• Capture the actual market yield vs. "guessing" what will be the best price, and
• Purchase large quantities of electricity or gas on a consistent basis (i.e. daily or monthly).

Pros:

• Removes "market timing" issues as pricing reflects market index
• Averages market costs on a more consistent basis (i.e. monthly vs. annually)
• Consistent market averaging generally out-performs annualized fixed pricing efforts by the average consumer over the long term (i.e. 3-5+ years).
• Generally results in a lower service fee from energy provider as there is no future cash flow and collections risk associated with outstanding energy supply and transmission service
• Allows for conversion to fixed-price option within same contract period or term

Cons:

• Allows minimal accuracy in cost forecasting and budgeting
• Offers minimal price stability and price certainty across a future period

Alternative C - COST STABILIZATION AND COST AVERAGING HYBRID is a strategy designed to offer the consumer with a blend of fixed and variable pricing benefits with less timing- and budgeting risk than any single individual strategy can offer.  This strategy is accomplished by customizing a purchasing strategy to the actual supply and transmission requirements of the consumer that will yield particular benefits at particular times (i.e. fixed price option during peak winter months with a variable option for the off-peak summer months) vs. one strategy all the time.  The cost stabilization and averaging mix is most applicable for consumers with a need or desire to:

• Diversify multi-account or large commercial energy portfolios,
• Maximize both cost stabilization and reduction on a consistent basis, and
• Hedge their purchasing positions with multiple strategies and timing elements.

Pros:

• Balances fixed price stability with variable price averaging (i.e. long-term and short-term balance)
• Stabilizes overall portfolio against over-exposure to any one market risk (i.e. timing and volatility)
• Allows for customized application of both cost stabilization and cost averaging within same contract period
• Affords more frequent cost correction via increased diversity of transaction timing and type

Cons:

• Requires frequent monitoring of market conditions to appropriately assess existing and future market opportunities
• Cost benefits are still subject to a limited mix of market timing risk, limited price forecasting, and cost budgeting