Businesses, Commercial users, and homeowner consumers that live in states with deregulated gas markets all have the option of purchasing their natural gas from a third-party other than the utility. This supplier can often provide lower rates than the utility and also offer multiple product choices that the utility is unable to offer.
Per mandate, the utility will continue to deliver the gas and provide maintenance on the gas lines, but the actual gas commodity is purchased through a third-party. Deregulation typically results in lower prices for the consumer and also allows the consumer to gain greater control over their energy budget.
With “bundled” service, a customer pays the utility company a single amount for usage and delivery of natural gas through utility’s already established network. The customer also enjoys the other benefits it has come to depend on from the utility: reliability, customer service, assistance during outages, meter-reading, rebates, etc. A bundled bill charges for all of those services and gas procurement services typically manages this bundling.
With Natural Gas Deregulation, the utility continues to charge for everything except the gas portion of the bill, but continues to provide – and charge for – all the previously mentioned services. The customer pays the producer or marketer for their natural gas and the utility continues to deliver that natural gas.
Natural gas marketing is a relatively new addition to the natural gas industry, beginning in the mid-1980's. Prior to the deregulation of the natural gas commodity market and the introduction of open access for everyone to natural gas pipelines, there was no role for natural gas marketers. Producers sold to pipelines, who sold to local distribution companies and other large volume natural gas users. Local distribution companies sold the natural gas purchased from the pipelines to retail end users,
including commercial and residential customers. Price regulation at all levels of this supply chain left no place for others to buy and sell natural gas. However, with the newly accessible competitive markets introduced gradually over the past fifteen years, natural gas marketing has become an integral component of the natural gas industry.
As a consumer of natural gas in a deregulated state you can choose to shop around for your natural gas supply and benefit from lower prices in a competitive energy marketplace. Now you can purchase your natural gas from an agent, broker or marketer. These are independent companies that either sell on behalf of gas producers or purchase supplies of gas and re-sell it to consumers. Securing a long term supply from one of these energy marketers when the gas prices are lower can result in significant savings over the term of your contract.
If you buy from a gas marketer, nothing about your service will change. You will still get a bill from your distributing utility which will indicate a regulated delivery charge. This is usually about 1/3 of your bill and a gas supply charge which is the remaining 2/3. The delivery charge will be kept by your distributing utility and the gas supply charge will be forwarded to the gas marketer or supplier you chose. If you switch to a gas marketer, there is no interruption of service nor any other additional fee charged.
Gas marketers offer varying contract terms and conditions. In general, however, you have two basic choices. You can sign on for a single or multi-year contract at a fixed price or you can choose a rebate option which means you pay the regulated price set by your distributing utility and will receive a rebate if your marketer can buy the supply for less than that price.