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 King of Prussia, Pennsylvania. Please see our Annual Report on Form 10-K for the Fiscal Year ended September 30, 2020 (“Fiscal 2020”) for a more detailed description of our business.
AmeriGas Propane is the nation’s largest retail propane distributor. In Fiscal 2020, AmeriGas Propane delivered 1.1 billion gallons of propane to over 1.5 million customers from all 50 states from approximately 1,800 propane distribution locations. As of September 30, 2020, AmeriGas Propane had approximately 6,500 employees.
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 2020, UGI International distributed approximately 870 million gallons of LPG and sold 29 Bcf of natural gas and over 3,400 Gwh of electricity. As of September 30, 2020, UGI International had over 2,600 employees.
UGI Utilities, Inc. (“UGI Utilities”) operates a regulated natural gas distribution business that serves approximately 670,000 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 12,300 miles of gas mains. 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, 2020, UGI Utilities had approximately 1,700 employees.
Midstream & Marketing
Our 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 14,000 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 interest in electric generation assets, principally in Pennsylvania. As of September 30, 2020, Energy Services had over 400 employees.
At a Glance
Consecutive years of increasing dividends
Consecutive years paying dividends
Miles of midstream pipeline
Miles of utility system gas mains
Billion retail LPG gallons delivered in Fiscal 2020
* Represents physically connected customers across all UGI subsidiaries
Mission, Vision & Values
UGI’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.
We are committed to sustainable business practices and growing our company in an environmentally responsible way. We offer innovative and efficient energy solutions, such as natural gas and LPG, which are clean-burning, efficient and cost-effective, to benefit our customers and communities.
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 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.
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.
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.
We do the right thing and act with honesty. We are ethical and trustworthy in all of our relationships.
Our Core Values provide the building blocks for our business.
The Foundation of a Renewable Energy Future
UGI has a long history of meeting its financial commitments to shareholders. For the last 140 years, the Company has grown its base business by offering differentiated and innovative solutions to match evolving consumer preferences. As the business grew, new business lines were added to enhance and strengthen our core competencies. Over the past 20 years, UGI has launched and expanded both its Midstream and Marketing and International businesses to scale. The Midstream and Marketing business has expanded and now offers a full suite of both midstream and marketing services in the Appalachian Basin and the eastern United States. UGI International has expanded into 17 countries and now delivers nearly 1 billion gallons of LPG. In Fiscal 2020, the two businesses combined to account for 48% of UGI’s total EPS.
During this time, UGI has never lost sight of its commitment to deliver sustainable, reliable, and affordable energy solutions to its customers. Throughout our history, UGI has converted customers to natural gas and LPG, which are cleaner alternatives to competing fuel sources such as heating oil, coal, and diesel fuel. We will build on this history and continue to lower emissions by providing our customers with low carbon energy solutions in the future.
UGI’s three-pronged approach to combat climate change is to:
- reduce our emissions through investment in infrastructure and more efficient operations;
- reduce our customers’ emissions through conversions, energy efficiency programs and fleet conversions; and
- invest in alternatives to reduce GHG emissions and provide low or zero carbon solutions to our customers.
UGI has recently committed to reducing its Scope I (direct) emissions by 55% over the next 5 years on its path to align with international efforts to reduce carbon emissions as outlined in the Paris Climate Accord. UGI also continues to work with customers to reduce their carbon footprints. We offer solutions such as combined heat and power projects, energy efficiency and conservation programs as well as fleet conversion opportunities to our clients.
At the same time, we invest in low or zero carbon alternatives. UGI is well positioned to expand on its core competencies, deliver innovative solutions, and become a leader in this space. Over the next five years, UGI has the opportunity to invest up to $1 billion in innovative renewable solutions with minimal disruption to our customers. We are investing in key areas such as Compressed Natural Gas (“CNG”), RNG, bio-Gas (such as bio-LPG and renewable dimethyl ether (“rDME”)) and hydrogen, without losing focus on our commitment to provide affordable, reliable, and sustainable solutions to our customers.
- Low or zero carbon attributes to tackle climate change
- Rapidly growing customer demand
- Synergistic opportunities as a producer and distributor of RNG and bio-LPG
- Strategic assets and proven competencies
- Progressing supply chain partnerships providing long-term competitive advantages
Over the last 140 years, UGI has built core competencies, core infrastructure, and a customer base that sets the foundation for the renewable energy future.
Our Core Competencies
We have established core competencies that 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 processing 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.
These proven competencies provide a key differentiator as we invest in strategic RNG businesses, including GHI Energy, LLC (“GHI”). In July 2020, UGI acquired GHI, a leading RNG marketer in California, a state with one of the most robust carbon credit trading programs in the nation. GHI is primarily focused on providing vehicle fleets with RNG by coordinating supply from a portfolio of sources across the country. The investment facilitates environmentally responsible growth for years to come.
A History of Innovative Solutions for Our Customers
Introduction of Composite Cylinders in France
Lightweight for consumers
Utilities Growth Extension Tariff (“GET”)
Provides natural gas service to areas that are currently unserved or underserved
Utilities Technology and Economic Development (“TED”)
Flexible rate offering for customers to support expansion of new technologies, such as Combined Heating & Power (“CHP”) and CNG
Utilities Natural Gas EE&C Program
Incentivizes customers to install high-efficiency appliances over less expensive, standard efficiency appliances
AmeriGas’ “Cynch” home delivery service
Convenience for customers; rolled out to 17 cities in the U.S. as of Fiscal 2020
AmeriGas 24/7 automated cylinder vending machines
Enhanced cylinder exchange experience
Our Core Infrastructure
UGI has core infrastructure that allows the business to deliver low carbon energy solutions to our customers with minimal disruption, including:
- 12,300 miles of gas pipeline;
- 2,400+ bobtail trucks;
- 1,800+ LPG distribution locations; and
- 0.5 TCF of natural gas throughput.
The expansion of UGI’s renewable offering may require additional infrastructure, but our current infrastructure and proven ability to construct new assets provides the necessary foundation to expand further into renewables.
The following are two recent examples of how UGI is investing in renewable infrastructure:
In November 2020, UGI invested in a renewable natural gas project in Idaho. The project consists of an upgrade to an existing dairy digester facility commissioned in 2012 that is currently generating renewable electricity and is expected to produce several hundred million cubic feet of RNG annually from on-site dairy waste feedstock once it is expanded to reach full production in 2022; initial production is expected to commence in late 2021.
In February 2021, UGI Utilities announced an agreement with Archaea Energy, LLC (“Archaea”) of Canonsburg, PA to accept delivery of RNG from the Keystone Landfill located in Dunmore, PA into its distribution system. This is the first RNG supply interconnect agreement UGI Utilities has signed to date. The RNG supply will be injected into UGI Utilities’ high-pressure natural gas pipeline serving its distribution system located in Lackawanna County, PA. The landfill gas, a byproduct of naturally decomposing materials in the landfill, will be processed and conditioned to meet UGI Utilities’ gas quality requirements. The project is scheduled to become operational in September 2021. 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, making this the largest RNG supply point in the United States to date. This supply point will be available for the Company, as well as for natural gas suppliers operating on its system, for the purpose of supplying UGI Utilities customers.
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 the Keystone Landfill into the atmosphere. 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.
Historical Renewable Energy Solutions Timeline
- 2009: Commenced methane and landfill gas consumption at Broad Mountain generation facility
- 2015: Began marketing bio-LPG in parts of Northern Europe
- 2017: Acquired DVEP, a marketer of wind and solar energy
- 2017: Began sourcing bio-molecules from Preem’s refinery in Sweden to augment existing bio-LPG sources
Our Customer Base
UGI is aligned with our customers to be a partner for both renewable and low-carbon solutions, and our physical connection to more than 3 million customers provides a solid foundation to meet customer demand for renewable solutions.
In early 2021, UGI Utilities partnered with UPS to deliver natural gas for its large regional fleet of CNG vehicles. This CNG facility is expected to be among the largest of its kind in North America. The use of natural gas will help UPS achieve significant emissions reductions.
In February 2021, UGI International announced its partnership with Ekobenz (a Polish company with a proprietary process to convert bioethanol to bio-LPG, a renewable form of propane-butane) for the exclusive supply and development of renewable bio-LPG in Europe. Our partnership with Ekobenz is an exciting opportunity and will be instrumental in leveraging our existing assets and capabilities as we continue to de-fossilize our supply infrastructure.
As we look to the future, our core competencies, core infrastructure, and physical connection to over 3 million customers provides the foundation of a renewable energy future. Our customers and suppliers have been eager to work with us to enhance our renewables offering and we have a clear line of sight on the potential for $1 billion of renewable investments over the next 5 years. As highlighted above, the Company has made a series of investments that strengthen our three-pronged strategy to combat climate change without losing focus of our commitment to provide our customers with affordable, reliable, and sustainable solutions.