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Learn Natural Gas Energy Choice Glossary
Natural Gas Energy Choice Glossary
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Energy Choice programs are becoming more and more common across the United States, giving consumers access to a greater number of utility services and the competitive offerings they provide.

We’ve created a glossary of key Energy Choice terms to help customers understand how these programs work, why they are growing, and what to expect when using an Energy Choice program to select an energy provider.

 

  • Energy Choice: A program that encourages competition in the natural gas market via deregulation. Traditionally, one natural gas utility served an entire region. Energy Choice opens up the market, allowing multiple natural gas companies to offer services to the same region. Customers can then choose the providers whose services or prices best suit their needs.
     
  • Utility: The company that owns, maintains and repairs the infrastructure (pipes and gas lines) necessary for delivering natural gas to customers. In the past, the utility would also supply natural gas to the entire region. In Energy Choice markets, the utility delivers both its own energy services and natural gas services from other suppliers.
     
  • Local Distribution Company (LDC): another name for utility, or the company that delivers natural gas to homes and businesses.
     
  • Supplier: In an Energy Choice market, a supplier is a natural gas provider that does not own or operate the infrastructure for energy delivery in a certain region. The supplier can sell energy service to customers and then have it delivered to the customers by the utility.
     
  • Deregulation: Energy Choice programs exist because of deregulation in the natural gas market. By relaxing regulations, government bodies can enable customers to purchase natural gas from retail suppliers rather than buying from a single regulated public utility.
     
  • Aggregation: Aggregation, or “group buying,” is an option available to customers in some Energy Choice programs. Under this arrangement, a large buying group can negotiate rates for purchasing natural gas that may be more favorable than what individual customers can get on their own. Aggregation can also help lock in superior rates for more extended periods, along with other benefits or incentives for members of the buying group.
     
  • NYMEX: NYMEX stands for “New York Mercantile Exchange.” It is the public market on which natural gas and other commodities are sold. The month-end settlement price for natural gas on NYMEX is used to determine supply rates.
     
  • Fixed Rate Plan: A fixed rate plan is an alternative type of Energy Choice agreement. Unlike variable rates, which can change monthly or quarterly depending on the utility company, fixed rate plans have per-unit prices that remain constant for an entire contracted term. The customer’s bill will still vary from month to month depending on how much natural gas they are using, but the per-unit supply price will not change.
     
  • Ccf: a unit of measurement for natural gas usage that refers to one hundred cubic feet
     
  • Mcf: a unit of measurement for natural gas usage that refers to one thousand cubic feet
     
  • Therm: a unit of measurement for natural gas usage that refers to one hundred thousand British Thermal units (BTUs)

 

These terms and others will likely come into play as you research Energy Choice programs, shop around for different energy suppliers within an Energy Choice program or start looking at contracts for service within an Energy Choice market. At Dominion Energy Solutions, we are always happy to answer any questions you might have about Energy Choice. Contact us today to learn more.

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