UGI Corporation is a publicly traded company listed on the New York Stock Exchange. UGI, through subsidiaries and affiliates, 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 International, Midstream & Marketing and UGI Utilities. 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 Fiscal 2019 for a more detailed description of our business.
The nation’s largest retail propane distributor, with delivery of over 1.1 billion gallons (2.1 million tons) of propane to over 1.6 million customers from all 50 states from approximately 1,800 propane distribution locations in Fiscal 2019. Approximately 7,550 employees as of September 30, 2019.
Distributed approximately 1 billion gallons (1.8 million tons) of liquefied petroleum gases (LPG) in 17 countries in Europe in Fiscal 2019 and operates an energy marketing business in four of those countries.
Approximately 2,700 employees as of September 30, 2019.
Operates a regulated natural gas distribution business that serves over 655,000 customers in portions of 44 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. Also provides regulated electric utility service to approximately 62,000 customers in portions of Luzerne and Wyoming countries in northeastern Pennsylvania. Approximately 1,600 employees as of September 30, 2019.
Midstream & Marketing
Markets natural gas, electricity and liquid fuels to over 12,500 residential, commercial and industrial customers in the eastern United States and the District of Columbia and conducts midstream natural gas business through its ownership of underground natural gas storage, gas peaking plants, and pipeline assets in Pennsylvania, Ohio, and West Virginia. UGI Energy Services also owns all or a portion of electric generation assets, principally in Pennsylvania. Approximately 700 employees as of September 30, 2019.
At a Glance
Million total customers
Consecutive years paying dividends
Miles of midstream pipeline
Miles of utility system gas mains
Consecutive years of increasing dividends
Billion retail LPG gallons delivered in Fiscal 2019
Our Values and Our Purpose
Purpose – Working together to safely and sustainably deliver fundamental and reliable energy needs for our customers while positively impacting the lives of our employees and the communities we serve.
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 do the right thing and act with honesty. We are ethical and trustworthy in all our relationships.
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 are a reliable service provider with a long-standing history in our communities. 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.
We are committed to sustainable 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 pursue innovative and efficient energy solutions to benefit our customers and our 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.
UGI Corporation boasts a rich history dating back to 1882. Our businesses have continued to adapt and thrive through major obstacles like the Great Depression, two World Wars and the major divestment of assets following the Public Utility Holding Company Act of 1935. Through that time, UGI has focused on safe and sustainable business practices, prudent balance sheet and capital management, and service to our customers and the communities in which we operate.
Today’s Energy, Tomorrow’s World
Environmental, Social and Governance (ESG) or Corporate Social Responsibility (CSR) reports offer organizations an opportunity to provide non-financial insight to their stakeholders. At UGI, we believe a successful report is the outcome of having appropriate processes and procedures in place to support sustainable business development and create long-term value. The process starts with our purpose and is supported by sound corporate governance and a dedication to our people.
Our purpose supports everything we do — working together to safely and sustainably deliver a fundamental need that enables comfortable and secure lives for our customers while positively impacting the lives of our employees and the communities we serve. Our teams provide energy products that heat homes and power businesses among other things. We distribute abundant and affordable low-carbon energy products and services that have effectively reduced greenhouse gas (GHG) emissions over the past 8 years. The chart below illustrates this impact for our natural gas service territory. UGI Utilities 2019 GHG emissions were approximately 17 million metric tons.
Total GHG Emissions Reduction (2012-2030)
1A CHP unit is a cogeneration system that produces heat and electrical power from gas simultaneously. A CHP unit is used for supplying power to buildings and hot water for heating or cooling through high efficiency heat and power generation.
2012-2019 GHG reduction contributing factors include
- UGI and customer fleet emission using Compressed Natural Gas (CNG)
- Reductions through our Energy Efficiency & Conservation (EE&C) programs
- Combined Heating and Power (CHP) customer installations
- Pipeline replacement program
- Conversion and upgrades
- Service replacements
- Environmental Protection Agency (EPA) Subpart W leak surveys
- UGI emissions as the result of operations
2020-2030 GHG reduction initiatives
- Introduce renewable natural gas (RNG) into our supply portfolio
- Add additional CNG customers
- Continue to enhance GHG reduction activities referenced above
Since 2012 UGI Utilities has displaced over 1.2 million metric tons of GHG emissions by offering affordable natural gas to our customers while continuing to develop innovative solutions to increase efficiency, enhance the safety of our pipeline infrastructure, and reduce UGI’s and UGI’s customers emissions. In the chart above, we evaluated our service territory in 2012 and incorporated all of the efforts our natural gas businesses have made since 2012 to reduce emissions and improve efficiency.
Like natural gas, LPG typically displaces fuel oil, which has a much heavier carbon footprint. The chart below illustrates the CO2 savings resulting from our customers using LPG versus the most comparable carbon-based alternative.
UGI International’s Annual Impact on Carbon
One tree sequesters 48 lbs of CO2 annually
UGI equates to over 115 million more trees annually
The average car creates 13,440 lbs annually
UGI equates to 412k car removals from the road each year
In US, average individual produces 42,500 lbs CO2 annually
UGI offsets the CO2 footprint of 58k people
All the activities depicted above underlie one of UGI’s values – responsibility. Our operations have a history of reducing GHG emissions for our customers and the communities we serve.
Natural gas and LPG are today’s energy sources. While these energy sources offer an alternative to heavier carbon products like coal and fuel oil, there is more to do to support tomorrow’s world. UGI is exploring innovative solutions across our businesses that promote efficiency while exploring the efficacy of alternative sources like renewable natural gas and bio-LPG. UGI believes in leading by example. We use alternative energy sources like solar and highly efficient systems like combined heating and power to fuel some of our buildings. Similarly, we incorporate compressed natural gas and LPG as fuel sources for our fleets. Our business continues to evolve and innovate to ensure that we are equipped to fulfill our purpose and reliably serve our customers.
Our purpose and our commitments to stakeholders require a wholistic, sustainable approach to our business. Said differently, our purpose, our commitments, and our approach to ESG intersects with long-term value creation. During Fiscal 2019, we announced our LPG business transformation initiatives. We expect that these strategic and sustainable measures will increase profitability and deliver a better customer experience. We expect to deliver operational efficiencies through accelerated investment in the customer digital experience, customer relationship management, operations design and specialization, distribution and routing optimization, sales effectiveness, procurement and supply and logistics. Our focus on customer welfare and efficiency is driving these changes, but to accomplish this transformation, AmeriGas and UGI International must have a sound foundation in areas like talent management, employee health and safety, supply chain management, customer privacy and data security. A greater emphasis on the digital experience, efficient tank fills and route optimization will sharply reduce the amount of paper needed and miles driven. These initiatives create long-term value for UGI, align with our purpose and support each aspect of effective ESG management. Similar strategies drive our investments and initiatives across all four of our businesses.
We will continue to focus on driving long-term value by focusing on innovative ways to utilize today’s energy to support tomorrow’s world.
UGI has a long history of meeting and exceeding its commitments to shareholders to grow long-term adjusted earnings per share by 6% – 10% annually and increase its dividend by 4% annually. As part of our ESG reporting efforts, we will enhance our disclosure and provide new commitments to all of our stakeholders, not just investors.
Supported by our purpose and values, UGI’s commitments reflect clear vision and direction from Company leadership. Our commitments will set expectations for all of our employees, customers, suppliers, regulators, trade associations and the communities we serve for UGI’s next 140 years.
UGI is committed to environmental responsibility and continues to challenge itself to deliver, and use, energy sustainably and pursue innovative solutions that benefit our customers and our shared resource: the environment. In order to reinforce this commitment, UGI plans to adopt both environmental and sustainability policies. These policies will be completed later this summer and posted to our website.
1 UGI plans to establish GHG emission reduction targets for the remainder of the businesses in the future.
Methane Reduction Targets
UGI is committed to reducing its operational fugitive methane emission rate from its Utility business by 92% by 2030 and 95% by 2040 compared to 1999 levels. This will be accomplished through our pipeline replacement and betterment program and continuous improvement to our leak detection and repair (LDAR) processes.
Greenhouse Gas Emissions Reductions Targets
UGI Utilities1 is targeting a reduction in GHG emissions of over 8 million metric tons by 2030 from 2012 levels. This will be accomplished by our pipeline replacement and betterment program, converting our fleets to cleaner-burning CNG, use of alternatives, and greater efficiency throughout our operations.
Health and Safety
The health and safety of our employees, customers, and the communities we serve are of the utmost importance. UGI is committed to becoming best-in-class in terms of safety performance and culture through continuous improvement in our safety metrics. For additional information on our Health and Safety programs please see the “Our People” section of this report.
UGI believes that the vitality of the communities we serve has been critical to our rich history and is essential to our continued success. Our employees embrace a wide variety of causes aimed at enhancing the quality of life for the communities we serve, including literacy programs, first responders, STEM programs, cancer awareness events, food banks, opioid abuse, veteran affairs and hunger. We commit to enhance our collaboration within the communities we serve every year as we explore new areas that align with our mission and have an even greater impact in our communities.
As two of our core values dictate, UGI is committed to the protection of basic human rights and treating all individuals with respect and integrity. UGI will build on our commitment to sound corporate governance and adopt an organization-wide Human Rights Policy. Once available, the Policy will be communicated broadly to our employees and disclosed on our website.
Employees are at the core of strengthening our business for tomorrow’s world. UGI is committed to attracting and retaining people who embrace our culture of safety, service, and integrity. We will continue to train our employees and provide opportunities for career development.
Last year, UGI worked with a sustainability expert to develop our first Materiality Assessment. We wanted our first report to reflect the topics that are most relevant to our stakeholders. We have expanded our disclosure to match the changing needs of our stakeholders, including the introduction of SASB reporting for our investors. We are committed to evaluating our disclosure on an ongoing basis to ensure we are addressing the topics that are most relevant to our stakeholders.