Policy Re: Approval of Audit and Non-Audit Services by the External Auditors

1. Audit Committee Pre-Approval of Services

In accordance with the requirements of securities regulations to which Veresen Inc. (the "Company") is subject and to safeguard the continued independence of the Company’s external auditors, all audit and non-audit services to be rendered by the Company’s external auditors and any related entities (the "Auditors") to the Company and its subsidiaries and proportionately consolidated entities must be the subject of pre-approval by the Audit Committee of the board of directors of the Company.  For purposes of this policy, all references to "the Company" shall include its subsidiary entities.

Such pre-approval shall be based on the following detailed policies and procedures established by the Audit Committee.

2.  Services that the Auditors May Not Provide

(a)  The Auditors may not act in any capacity where they could reasonably be seen to:

(i)  function in the role of the Company’s management;

(ii)  audit their own work; or

(iii)  serve in an advocacy role on behalf of the Company.

(b)  Except as otherwise permitted and pre-approved hereby, the Auditors will not be asked to provide any services in the following areas (in each case as more fully defined in applicable corporate and securities regulations or the regulations and guidelines of the appropriate oversight authorities governing the accounting and auditing profession):

(i)   bookkeeping and related functions;

(ii)  financial information systems design and implementation;

(iii)  appraisal, valuation, fairness opinions or contribution-in-kind reports;

(iv)  actuarial services;

(v)  internal audit outsourcing;

(vi)  management functions and human resources functions;

(vii)  broker-dealer, investment advisor or investment banking services;

(viii)  legal services; and

(ix)  expert services.

3.  Pre-Approval of a Range of Services

The engagement for the annual audit of the Company’s consolidated financial statements is specifically approved on an annual basis by the execution of the audit engagement letter with the Auditors.  Engagements of the Auditors involving services for the Company that fall into the service definitions set forth in Appendix A shall be considered pre-approved by the Audit Committee under this policy.

It is the responsibility of management to determine whether a particular service is covered by the pre-approved range of services covered in Section 3. Management should seek the guidance of the Chair of the Audit Committee where there is any ambiguity about whether a particular service is pre-approved.

The general pre-approval of the range of services covered under this Section 3 will be brought to the Audit Committee for review and, if thought appropriate, renewal on an annual basis.

4.  Limits on the Pre-Approval of a Range of Services

In the case of proposed engagements of the Auditors involving any services covered under the range of services in Section 3 where the fees for a particular engagement are expected to exceed a total of $50,000, specific pre-approval must be obtained therefor under the provisions of Section 5 hereof.

5.  Pre-Approval of Individual Services

If an engagement with the Auditors for a particular service is not prohibited under Section 2 hereof, is not covered under the range of services in Section 3, or exceeds the limits specified in Section 4 hereof, in order for such engagement to proceed, it must be pre-approved by the Audit Committee.  The Chair of the Audit Committee shall have the authority to effect any pre-approval, on behalf of the Audit Committee, provided the aggregate fees for all such services does not exceed $50,000.  Any pre-approval by the Chair of the Audit Committee pursuant to this Section 5 must be presented to the Audit Committee at the first scheduled meeting of the Audit Committee following such approval.

Under no circumstances may the Audit Committee delegate its responsibilities to the Company’s management.

6.  Engagement Letters

Pre-approved non-audit services shall be provided by the Auditors pursuant to an engagement letter with the Company that satisfies each of the following requirements:

(a)  the engagement letter shall be in writing and signed by the Auditors; and

(b)   the engagement letter shall set out the particular non-audit services to be provided by the Auditors which, unless individually pre-approved, shall be within the categories of pre-approved non-audit services described in Section 3 hereof.

7.  Reports of Services to the Audit Committee

At every regularly-scheduled meeting of the Audit Committee, management shall report on all new pre-approved engagements of the Auditors since the last such report.  The Auditors may comment on the report if they wish to do so.  All engagement letters entered into pursuant hereto shall be made available to the Audit Committee upon demand.

8.  Effective Date

The effective date of this policy is January 1, 2011.