Our Business

UGI Corporation is a publicly traded company listed on the New York Stock Exchange. Through subsidiaries and affiliates, UGI distributes, stores, transports and markets energy products and related services.

Our subsidiaries and affiliates operate principally in the following four business segments: AmeriGas Propane, UGI Utilities, UGI International, and Midstream & Marketing. Our business strategy is to grow our business responsibly by focusing on our core competencies. Our corporate headquarters is in Valley Forge, Pennsylvania. Please see our Annual Report on Form 10-K for the Fiscal Year ended September 30, 2021 (“Fiscal 2021”) for a more detailed description of our business.

AmeriGas Propane

AmeriGas Propane is the nation’s largest retail propane distributor. In Fiscal 2021, AmeriGas Propane delivered 1.1 billion gallons of propane to nearly 1.4 million customers from all 50 states from approximately 1,600 propane distribution locations. As of September 30, 2021, AmeriGas Propane had approximately 5,800 employees.

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UGI International

UGI International distributes liquefied petroleum gas (“LPG”) in 17 countries throughout Europe and conducts an energy marketing business in France, Belgium, the Netherlands and the United Kingdom. In Fiscal 2021, UGI International distributed approximately 975 million gallons of LPG and sold 36 Bcf of natural gas and over 3,300 Gwh of electricity. As of September 30, 2021, UGI International had over 2,600 employees.

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UGI Utilities

UGI Utilities, Inc. (“UGI Utilities”) operates a regulated natural gas distribution business that serves approximately 672,000 customers in portions of 46 eastern and central Pennsylvania counties and more than 500 customers in portions of one Maryland county through its distribution system of approximately 12,400 miles of gas mains.

In September 2021, Utilities acquired Mountaineer Gas Company (“Mountaineer”), whereby Mountaineer became an indirect, wholly owned subsidiary of UGI Corporation. Mountaineer provides regulated natural gas distribution to nearly 214,000 customers in West Virginia. Mountaineer’s system is comprised of approximately 6,200 miles of distribution, transmission and gathering pipelines. As of September 30, 2021, Mountaineer had more than 460 employees.

UGI Utilities also provides regulated electric utility service to more than 62,500 customers in portions of Luzerne and Wyoming counties in northeastern Pennsylvania. As of September 30, 2021, UGI Utilities had over 1,700 employees.

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Midstream & Marketing

Our domestic retail energy marketing business is conducted through UGI Energy Services, LLC (“Energy Services”), which sells natural gas, renewable natural gas, liquid fuels and electricity to nearly 12,600 residential, commercial and industrial customers in 12 eastern states and the District of Columbia. UGI Energy Services also conducts midstream natural gas operations through its ownership of underground natural gas storage, gas peaking plants, and pipeline assets in Pennsylvania, Ohio, and West Virginia. Energy Services also has ownership interests in electric generation assets, principally in Pennsylvania. As of September 30, 2021, Energy Services had over 400 employees.

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At a Glance

Consecutive years of increasing dividends

Consecutive years paying dividends

Miles of midstream pipeline

Miles of utility system gas mains

Countries

Employees worldwide

Million customers*

Billion retail LPG gallons delivered in Fiscal 2021

* Represents physically connected customers across all UGI subsidiaries

Mission, Vision & Values

GI’s mission is to be the preeminent energy distribution company in our targeted markets by providing a superior range of clean and sustainable energy solutions to our customers.

At UGI, we believe that sustainable, reliable, and affordable energy solutions are a necessity for our customers and communities. We strive to deliver
this fundamental need through best-in-class safety, operations, products, and services while enhancing the quality of life of our employees, customers, and the communities we serve.

Our Vision is supported by our deeply-rooted Core Values, which are the basis for how we approach our daily work on behalf of our stakeholders.

Our Core Values provide the building blocks for our business.

Sustainability

We are committed to responsible business practices and growing the Company in an environmentally responsible way. Natural gas and LPG are clean-burning, efficient, cost-effective, and abundantly available energy sources. We will continue to supplement and replace with innovative, efficient and renewable energy solutions to benefit our customers and our communities.

Reliability

We are a reliable service provider with a long- standing history in our community. We recognize that our customers and communities rely on the products and services we provide. In turn, we support the communities we serve through our investment in critical infrastructure and our team’s commitment to philanthropic activities.

Safety

Safety is a way of life for us. We take the time to be safe, safeguard one another and make safety a priority in our interactions with our colleagues, customers, and communities.

Excellence

We are committed to achieving exceptional performance through disciplined growth, execution and continuous improvement. Our goal is to deliver the best value to our investors as a high-performing investment, to our customers as a best-in-class service provider, to our employees as a great place to work, and to our communities as a valued neighbor.

Respect

We embrace the diversity and uniqueness of individuals and cultures and the varied perspectives they provide. We recognize that our success depends upon the commitment and capabilities of our employees to create greater value for all.

Integrity

We do the right thing and act with honesty. We are ethical and trustworthy in all of our relationships.

United Nations Sustainable Development Goals

The United Nations Sustainable Development Goals (“SDGs”) are a collection of 17 interlinked global goals. Taken together, the SDGs set a blueprint for achieving a better, more sustainable future. UGI is committed to supporting the achievement of the SDGs, which aim to address global challenges and achieve peace and prosperity for all.

UGI’s mission aligns strongly with the SDG agenda, but we are focused on making the greatest impact in goals 7, 8, 10, and 13. These four goals are most closely linked to our mission, vision, values, strategy and recent investments. Throughout the report, you will see the images of these 4 SDGs where UGI is making the greatest impact.

 

A year of innovation & progress

Leveraging our Infrastructure and Core Competencies to Lower Emissions for both UGI and our Customers

Global LPG1

A strategic focus on decarbonizing our industry and investing in adjacencies

Joint Venture with SHV

  • Collaboration to advance the production of renewable dimethyl ether (“rDME”) to accelerate renewable solutions for the LPG industry.
  • Will bring scale and critical mass to the rDME market by developing opportunities for investment in production capacity.

UGI’s Core Competencies

UGI’s core competencies span a number of critical areas to promote growth in the renewables space, including:

  • proven supply capabilities and vast energy marketing experience;
  • a history of safe pipeline management, project management, and process engineering;
  • experience in renewable gas credit markets (Renewable Identification Number (“RIN”) and Low Carbon Fuel Standards (“LCFS”));
  • experience in solar credit markets (Renewable Energy Credits (“RECs”)); and
  • experience navigating the legislative and regulatory landscapes.

rDME Explained

rDME is a complementary liquid gas that can be produced from multiple renewable feedstocks. A safe, cost-effective and clean-burning fuel, rDME is a viable sustainable addition to the energy mix. It has a low carbon footprint and can reduce emissions by up to 85% compared to fossil fuel alternatives. In both pure or blended form, rDME can help the de-fossilization of LPG by becoming a sustainable alternative for off-grid energy uses including heating, cooking and transport.

rDME is highly compatible with existing infrastructure and equipment. Therefore, with limited incremental investment, rDME can help to quickly transition the LPG industry to a more sustainable future.

Expansion of Renewable Liquefied Gas (“rLG”)2 Offering

  • UGI International has agreement with Ekobenz for rLG supply.
  • Enables UGI’s customers to decarbonize their operations to support the goals of the Paris climate accord to achieve net zero carbon emissions by 2050.
  • Supports UGI International´s ambition of aligning and, where possible, surpassing those sustainable targets as set in the EU’s Renewable Energy Directive II (“RED II”) guidance protocol.

rLG Explained

rLG and conventional LPG are chemically identical, but they are produced from different feedstocks.

  • Drop-in: can be blended at any rate and still be used in existing infrastructure and appliances so distribu­tors and consumers do not need to change or upgrade their equipment or appliances
  • Renewable: made from a diverse mix of sustainable feedstocks and processes
  • Low Carbon: the carbon footprint of rLG is up to 80% lower than that of conventional LPG, depending on the feedstock, and carries the same low nitrogen oxides (“NOx”), sulfur oxides (“SOx”), and particulate matter (“PM”) as conventional LPG
  • Instant heat: provides on-demand heat and hot water compared to alternatives such as heat pumps

Investing in Adjacencies – Vertimass Agreement

  • Utilizes Vertimass’ catalytic technology to produce renewable fuels from renewable-ethanol in the U.S. and Europe.
  • Converts renewable ethanol into rLG and sustainable aviation fuel (“SAF”).
  • This technology can be bolted on to existing ethanol production facilities, optimizing GHG emissions reduction, and bringing further end product diversification to the existing ethanol producer.
  • Up to 50% of the total production capacity from the facilities can be rLG that will support UGI’s ongoing efforts to provide innovative, low-carbon, sustainable energy solutions to its customers.

Significance of SAF

SAF is a clean substitute for fossil jet fuels. Since SAF is drop-in fuel, it can be blended with fossil jet fuel and the blended fuel requires no special infrastructure or equipment changes.

Low-Carbon and Strategic Supply & Logistics Initiative

In February 2022, AmeriGas entered into an agreement with Global Clean Energy Holdings, Inc. (“GCEH”) to purchase and distribute renewable liquefied gas. AmeriGas will leverage its supply and logistics infrastructure and sales and marketing teams to market and distribute rLG to new and existing customers primarily in the state of California. rLG is chemically identical to today’s fossil LPG (C3H8) and, therefore, can be used with existing infrastructure. It has up to an 80% lower carbon footprint than that of conventional LPG and a much lower carbon intensity than conventional diesel or gasoline fuels.

As part of a multi-year agreement, GCEH’s Bakersfield bio-refinery will process up to 15,000 barrels of renewable feedstock per day, including their proprietary energy crop camelina, to produce renewable fuels including rLG. This bio-refinery is expected to begin operations in the Fall of 2022, and is projected to produce approximately 13 million gallons of rLG in its first year, making it the largest commercially available rLG production facility to date in the United States.

GCEH is a vertically-integrated renewable fuels company specializing in nonfood-based feedstocks used for the production of advanced biofuels and biomaterials. With a footprint that stretches from the laboratory to the farm gate to bio-refinery production, GCEH’s farm-to-fuels value chain integration provides access to reliable, ultra-low carbon feedstocks.

When online, the Bakersfield Biorefinery will be the only facility of its type, processing both traditional bio feedstocks as well as domestically grown camelina oil into sustainable, ultra-low carbon fuels in California.

What is Camelina

Camelina is a crop that can be planted on less productive land and in areas without sufficient rainfall to support other crops. By planting camelina, farmers are able to maximize the utility of this land without displacing acreage used for food production. Plants naturally absorb carbon dioxide as they grow. An additional benefit is that when camelina is used as a feedstock to produce renewable diesel it can significantly reduce greenhouse gas emissions.

Natural Gas

A full business approach leveraging strategic partnerships, energy marketing experience, and regulatory progress

Renewable Natural Gas

RNG is pipeline-quality gas that is fully interchangeable with conventional natural gas and can be converted to compressed natural gas (“CNG”) or liquefied natural gas (“LNG”).

RNG is a biogas, meaning that it is produced from organic matter, such as manure and food waste, that has been processed to purity standards. The production of RNG requires the removal of impurities, such as carbon dioxide, hydrogen sulfide, oxygen, nitrogen and other gases to meet strict pipeline and utility quality standards.

Demand for RNG is growing worldwide due to increased awareness of environmental concerns and an interest in clean energy alternatives. RNG is a low-carbon alternative to its fossil fuel counterpart.

Strategic Partnerships

In Fiscal 2021, UGI entered into a number of strategic RNG partnerships in Idaho, New York, Ohio, Kentucky, and South Dakota. These dairy farm, landfill, and food waste partnerships capture fugitive methane, which is the byproduct of waste decomposition, and prevent it from being released into the atmosphere.

Idaho project
• RNG production of ~250 million cu. ft./year from on-site dairy waste feedstock

Cayuga (New York)
• RNG production of ~50 million cu. ft./year from on-site dairy waste feedstock

MBL Bioenergy (South Dakota)
• RNG production of ~650 million cu. ft./year from on-site dairy waste feedstock

Food Waste Projects

Hamilton (Ohio and Kentucky)
• Anaerobic digester project to produce RNG from food waste
• RNG production of ~250,000 MMBTUs (million BTUs)

Landfill Projects

UGI Utilities entered into the largest RNG supply interconnect agreement in the United States to date with Archaea Energy to accept delivery of RNG from the Keystone Landfill located in Dunmore, PA into its distribution system. When fully operational, the UGI Utilities system will be designed to take up to 16,000 mcf (thousand cubic feet) per day of RNG supply at a rate of up to 780 mcf per hour.

Energy Marketing Experience

In Fiscal 2020, UGI acquired GHI, a leading marketer in renewable natural gas. Adding GHI to UGI’s portfolio has provided UGI with a platform for growth in RNG projects and has created synergistic opportunities with GHI as the exclusive offtaker and marketer of the RNG for the Cayuga, Hamilton, and MBL Bioenergy RNG projects.

In Fiscal 2021, GHI marketed over 1.1 BCF of RNG.

Regulatory Progress

UGI Receives Regulatory Approval for Renewable Natural Gas Pilot Project

On October 21, 2021, UGI Utilities received regulatory approval from the Pennsylvania Public Utility Commission (“PA PUC”) to purchase renewable natural gas as part of a five-year pilot program. The pilot program is the first of its kind in Pennsylvania and is intended to explore how UGI Utilities can integrate RNG into its supply portfolio to produce economic and environmental benefits for its Purchased Gas Cost (“PGC”) customers. The pilot allows UGI Utilities to test adding RNG to its supply portfolio while leveraging certain available economic incentives for renewables to lessen the cost impact of purchasing RNG for customers. UGI Utilities, a subsidiary of UGI Corporation, is the second largest regulated gas utility in Pennsylvania.

Environmental Energy Impact – Reducing Emissions

The incorporation of the RNG supply into UGI Utilities’ distribution system provides benefits to the Company and to the many communities it serves. In addition to securing a local source of gas for UGI Utilities customers, accepting the delivery of RNG for customer use reduces the release of naturally occurring methane. From an environmental perspective, accepting delivery of the RNG will reduce CO2 emissions that would otherwise occur by up to approximately 314,000 metric tons per year. This CO2 reduction equates to removing the emissions from more than 67,000 passenger vehicles over the course of a calendar year.

UGI’s RNG agreement with Archea Energy equates to removing the emissions of more than 67,000 cars over the course of a calendar year.

UGI remains committed to developing renewable energy sources for the communities we serve. The approval of this pilot program is a significant step forward as we continue to develop sustainable, environmentally responsible energy solutions for our customers.

Robert F. Beard

Executive Vice President - Natural Gas, Global Engineering & Construction and Procurement

A Culture of Sustainability

UGI International operates in 17 different European countries, our customers have various expectations, we have different brands, but fundamentally, we recognize the power of operating as One Business. ESG is one of the threads that helps to tie our International operations together, and ensures we are aligned with UGI Corporation’s values and objectives.

As I reflect on the theme of this year’s report, I am proud to report an exceptional year of progress at UGI International. Our culture has embraced sustainability and we continue to identify areas where sustainability and overall efficiency can give our business an advantage.

UGI International operates in 17 different European countries, our customers have various expectations, we have different brands, but fundamentally, we recognize the power of operating as One Business. ESG is one of the threads that helps to tie our International operations together, and ensures we are aligned with UGI Corporation’s values and objectives.

As I reflect on the theme of this year’s report, I am proud to report an exceptional year of progress at UGI International. Our culture has embraced sustainability and we continue to identify areas where sustainability and overall efficiency can give our business an advantage.

I would like to start with environmental sustainability. For decades, UGI International has been supplying energy to our customers, supporting the development of our society, as we know it today. Now we are ready to take the next step towards a carbon-neutral future. We are focused on measurable, actionable, and impactful goals. We created a “Roadmap to 2030” to guide our efforts as we embark on a new chapter with renewable energy solutions. Beyond that, we will continue to position our business to align with the Paris Climate Accord and leave no one behind in the race to green. That is why we are now focusing our investment efforts towards replacing our fossil fuel products with sustainable alternatives.

We have identified three economically viable, climate-friendly solutions that can help lower our customer emissions significantly: rDME, Renewable alcohol to hydrocarbon, and Power-to-x-technology. All of these technologies produce renewable solutions that do not require our customers to buy or modify infrastructure. They are true “drop-in” solutions that will initially be blended with LPG and later replace it . Using these building blocks, we are setting a goal to lower our customers’ carbon emissions by 50% before 2030 – a critical component in our “Roadmap to 2030.” We are addressing the challenge of decarbonizing households and businesses that are not connected to the natural gas grid by providing rapid and affordable low carbon heating solutions, exemplifying our commitment to leave no one behind in the race to green.

Next, I want to turn to efficient operations. In 2021, our team in the UK implemented new technology and enhanced training to lower the emissions from our fleet by over 6%. Efficiency measures like this can provide a roadmap for further reduction of our Scope I emissions. Similarly, we have identified opportunities for more efficient energy management. Two of our facilities in France are ISO 500001 certified and we are taking the learnings from that process and applying them to other facilities. This has led to a shift in the way we think about office space. Our new offices and production sites now have much higher environmental and efficiency standards.

This focus on efficiency has captured the interest of our employees. In 2021 we launched the EcoChallenge where our employees could propose projects that increase efficiency and lower emissions. Lastly, over the past few years we have taken the opportunity to cost effectively drive our Scope II emissions in France to nearly zero. We focused our initial Scope II reduction efforts in France as our French operations represent the majority of UGI International’s activity.

Although not in Fiscal 2021, I would like to point out my pride in how quickly our local Eastern European operations in Hungary, Romania, the Czech Republic, Slovakia, and Poland responded to help thousands of people fleeing the terrible events in Ukraine. One example of how this concrete support took place can be found in Poland, where our employees work closely with World Central Kitchen to provide guidance on safety and supply the gas cylinders necessary to power WCK’s kitchens and feed thousands of displaced Ukrainians.

At a more internal level, we have engaged in the twin-challenge of reducing the carbon footprint of our in-house processes, as well as the carbon emissions from the products used by our customers, which is the source of 90% of UGI International’s total emissions.

All in all, to wrap up this year’s statement on our ESG efforts, I want to thank everyone for their efforts in fostering a culture of sustainability at UGI International during these challenging times, with wishes for a more peaceful year ahead.

— Laurence Broseta
President, UGI International

  1. Global LPG is comprised of AmeriGas and UGI International businesses.
  2. There is not a fully agreed upon naming convention for low carbon or renewable LPG. We are referring to these molecules as “renewable liquefied gas” or “rLG” throughout the document, but will align our naming convention in the future with industry standards. Chemically speaking, renewable propane and bio-LPG have slightly different molecular compositions but as a fuel, they are the same.