EAS Group LLC
Natural Gas Industry and Information
An important aspect of our job is to educate our customers about the natural gas industry and we've provided links below to many of the most informative sites on the subject that we've found and read frequently. Feel free to dig as deep as you want in learning about the natural gas industry.
In addition, below is a list of common terms that you may hear regarding your natural gas bill:
Transportation and Distribution charges - these are the fees that you pay your local utility for the use of its infrastructure (e.g. pipes and storage). These fees are set by the local utility and we cannot do anything to help with these charges. Fortunately, they typically represent only 20% of the total bill.
Supply charges - these are the fees that you pay to the natural gas supplier that provides the commodity to your home or business. In the states that we do business, consumers can choose who they want as their natural gas supplier and that is where we provide value. We can help reduce the rates that you pay for the commodity. Typically, these charges represent 80% of your overall bill.
Mcf - stands for thousand cubic feet and represents a common unit of measure of natural gas volume. For reference 1 MMBtu = 1 Mcf
ccf - stands for hundred cubic feet and represents another common unit of measure of natural gas volume.
Fixed rate plan - is a type of pricing plan in which your natural gas supply charges are fixed for a period of time. The risk of rate changes lie with the natural gas supplier as they are locked into providing you natural gas at the agreed upon fixed rate. Typically, a premium is paid for a fixed rate as it is like an insurance policy guaranteeing you a level cost per Mcf or ccf for the term of the contract. Many fixed rate plans come with a cancellation fee.
Variable rate plan - is a type of pricing plan that varies from month to month or quarter to quarter. The degree to which it varies may or may not be in line with the movement of the underlying commodity price of natural gas. (e.g., some companies offer very low teaser rates in the summer and increase them during the fall and winter months but not necessarily in line with the market price of natural gas during those same months).
Market based rate plan - is a type of variable rate plan that does move in conjunction with the market price of the underlying commodity. If the price of the commodity increases so will the market based rate plan, if it decreases then so too will the market based rate plan's pricing. Historically, at any given month, the market based rate pricing will generally provide the most favorable pricing for the consumer.
Adders - these are costs added by the natural gas supplier to cover their costs of operations and provide a profit. Since all natural gas suppliers buy gas at the same price, those companies with lower overhead structures tend to be able to offer the most attractive pricing to consumers because their adders do not need to be as high to generate a profit.
NYMEX - Stands for the New York Merchantile Exchange and is the world's largest physical commodity futures exchange. The pricing of natural gas on the NYMEX represents the wholesale cost of the commodity paid by natural gas suppliers.
http://www.nymex.com/ng_pre_agree.aspx
Energy Information Association Natural Gas site
Natural gas pricing chart on the NYMEX
Article on new Shale discoveries of natural gas
If this sounds like a great business to you and you'd like to learn more about it, email us at info@easgroupllc.net
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