A strong natural gas strategy allows you to manage your costs and gives you protection when you need it most.
What factors impact the solution you choose?
Your advisor will work with you to understand your organization’s risk tolerance and goals to help you choose a solution that’s the right fit for you.
Your natural gas cost is made up of two components.
the gas itself
The charge for how the gas is delivered to your facility. The two options are Citygate and Burner Tip, which is specified by the supplier.
Most clients prefer a solution that is all-inclusive and does not break out the individual costs.
What are my options?
Your advisor uses your organization’s usage patterns and risk tolerance to find the solution that meets your needs.
What is swing percentage, and why does it matter?
Swing percentage is a distinguishing factor between gas solutions. Your “swing” indicates how much you can deviate from your monthly usage and still be charged your fixed rate. The most selected swing options are 0% swing, 10% swing, and 100% swing.
Your supplier determines your monthly quantities based on historical usage. Any therms you use over your monthly nominations are purchased at the market rate. If you use less than your monthly nomination, those unused therms are sold back to the market and you are credited the different based on the current market.
If you exceed more than 10 percent of your contracted quantities, you pay a market rate for those additional volumes. If you use under 90 percent of your contracted quantities, the supplier sells the remaining quantity back to the market and credits you the difference at market rates.