Natural Gas Procurement

Some energy consultants focus only on electricity and do not have the expertise to manage natural gas procurement. Power Connection has significant experience and expertise in advising clients on handling natural gas purchases. We are able to assist clients across all deregulated natural gas markets in the United States. Today, most states and Washington D.C. are deregulated to some extent. Power Connection leverages its nationwide reach and experience with its regional presence and knowledge to assist our clients in making the best energy decisions specific to their situation.

Natural gas prices can be affected by the amount of natural gas production, level of natural gas in storage, volumes of natural gas imports and exports, availability and prices of competing fuels, weather, political events and other economic factors. The price will generally be quoted in dollars per dekatherm (Dth), therm (Th) or dollars per million British thermal units (MMBtu). Common components that comprise a natural gas rate are:

• Commodity: The cost of natural gas. This will be what the suppliers calculate to purchase the amount of gas you need on the wholesale market for the term of your agreement. Most contracts are priced through the New York Mercantile Exchange (NYMEX).
• Basis: The basis is the cost difference to move your natural gas from the NYMEX at the Henry Hub in Louisiana, to your delivery point. The basis may be added or subtracted from the NYMEX price.
• Fuel or Losses: The costs to replace the gas that is used or lost along the pipeline between your local distribution company and your business.

Again, your company must determine if you are risk-averse or are able to withstand the large potential market swings.