Centrica plc – Key Metrics

1. The Future Face of Retail Energy Market Competition in AlbertaRobert Hemstock – Vice President, Regulatory AffairsDirect Energy Marketing LimitedEconomics Society of CalgaryMarch 19, 2003

2. Centrica plc – Key Metrics • Formed 6 years ago by demerger of British Gas • US$20bn annual turnover • US$11bn market capitalisation • Serves over 20 million households with energy and services products • Sales average over 2 products per household • 33,000 employees • Long term credit rating A2/A

3. business services UK Brand Units Gas and electricity production, trading, commodity sourcing, risk management Gas, electricity, home services Roadside assistance, travel services, automobile sales and service, home & motor insurance, financial services Credit card, Internet banking, financial services Retail telecoms, broadband B2B energy and services

4. ? 0.5 million ? 1 million 1.1 million ? 1.6 million 4.5 million 4.5 million 11 million ? ? ? 14 million ? UK Product Relationships (Q3 2001) Loans & Credit Credit Card Insurance Home Services Motoring Services Gas Customers Electricity Customers Telecoms

5. Shareholder Value Energy Services Shareholder Value Margin DEML Margin Energy 1.5 2.0 1.0 Products per customer

6. Centrica’s Vision for North America • We aim to become the leading retailer of energy • and essential services to residential, commercial • and small business customers in North America • We will achieve this by offering our customers: • choice • a suite of competitive products and services • outstanding customer service

7. Progress to Date – North America • Entered market in August 2000 • Completed 6 acquisitions for US$1.6bn • Over US$100m invested in organic growth • Recouped US$0.5bn through hiving off ESI water heaters • Entered Ontario and Texas power markets in 2002 • Announced ATCO Transaction in December 2002 • Will have 5½ million customers by mid-2003 • 2,500 full time employees • 2002 revenues C$2.8bn • New brand roll-out has commenced

8. Progress to Date - Alberta • Purchase of 810,000 gas customers and 167,000 electricity customers from ATCO • 10 year service agreement with ATCO I-Tek, preserving 700 jobs in Edmonton and assuring smooth transition for customers • 2 year co-branding agreement with ATCO • Alberta Government more stable and business friendly – it consults and takes into account industry stakeholder views • Legislation to be passed and AEUB approval by mid-year with entry shortly afterwards • Need a level playing field – AEUB and municipal utility taxes • Centrica adds real competition to Enmax and Epcor and will lead to innovation, customer choice and improved customer service for Alberta citizens

9. Disposition of Businesses 50,000 gas customersin Manitoba 17,000 businessservice accountsacross Canada Main Offices 100 mmcf/day of gasand 0.5 million bbl paof oil and gas liquidsproduction in Alberta 1.8 million households taking;2.9 million energy and servicesproducts in Ontario 980,000 ATCO gas and electricity customersbeing acquired in Alberta 450,000 gas customersin Michigan, Ohio, Georgiaand Pennsylvania 800,000 electricitycustomers in West and South Texas 80,000 electricitycustomers in Houstonand Dallas/Fort Worth

10. Current Landscape • Crisis of confidence in power industry (California, Enron, round trip trades, re-statement of results, etc) • Political caution resulting in ineffective competition legislation and little incentive for new players to enter markets • Regulators favouring incumbents • Political opportunism and interference in operation and content of regulation (eg Ontario Bills 58, 210) These factors have slowed down the emergence ofreal competition in many markets and have increasedcosts for new entrants

11. 6-Point Plan for Successful Retail Competition • Clear vision of the end point • Separation of distribution and retail • Full recognition of retail costs in setting distribution tariffs • POLR mechanism, not long termdefault service • Headroom for new entrants • Liquid wholesale marketsand….. • Politicians/regulators with the resolve to see it through

12. What It Will Take to Win • Successful retailers will be those who: • Create scale by accessing customers both organically and through acquisition • Have a wider product offer than just energy • Can provide outstanding customer service • Have advanced risk management skills • Leverage these with upstream asset ownership • And are large and well-capitalised: • Need for critical mass in systems, overhead support • Strong credit capacity required • Investment demands for upstream assets

13. Centrica - Strategic Summary • Establish leading, branded energy + services positions in core markets through organic growth and acquisitions • Maintain an operational portfolio of emerging markets, from which future core markets can be developed • Work hard to shape legislation and regulation to foster truly competitive markets • Develop our B2B operations in Canada and into the USA • Reinforce risk management with 20-40% upstream asset physical hedge

14. Contact Information: Robert Hemstock Vice-President, Regulatory Affairs, Western Region Direct Energy Marketing Limited 1000 – 111 5th Ave. SW Calgary, Alberta T2P 3Y6 Email: Robert.Hemstock@directenergy.com Phone: 403-290-8863 Fax: 403-266-6684 Cell: 403-818-6797