Natural Gas Education
Deregulated Natural Gas Market Overview
At a high level, deregulated natural gas markets are composed of three entities working together to bring customers choices and options for natural gas service.
Natural Gas Supplier
Retail suppliers provide the actual natural gas commodity. The cost of this energy represents approximately 75 percent of your overall costs and is largely determined by a wholesale market that trends higher or lower based on supply and demand, weather or other related factors. The most visible wholesale market for natural gas futures is the New York Mercantile Exchange (NYMEX).
Natural gas travels from the well to the utility’s service territory through major interstate gas pipelines that run throughout the country. Charges associated with transporting natural gas typically account for 10 percent of your overall charges.
Once natural gas is transported from the well, it is delivered to the end-use customer through the utility’s distribution network. Distribution charges account for approximately 15 percent of your overall natural gas costs and are consistent, regardless of your supplier.