Composition of Gas Price

 

Natural gas supply is comprised of:

  1. The extraction of natural gas from the ground Commodity Cost.
  2. The interstate transportation of gas into a local region by pipeline.
  3. The delivery of gas from the city gate to the customer (LDC).
 

1. Commodity Cost

The wholesale price of natural gas is determined by trading on the New York Mercantile Exchange (NYMEX), as well as at regional "hubs".

2. Interstate Pipeline Transportation Charges

Natural gas originates in Texas, Louisiana and in the Gulf of Mexico. Two main interstate pipeline transmission companies, Florida Gas Transmission (FGT) and Gulfstream Natural Gas System, charge a fee for the transportation and delivery of natural gas supplies from the gas production areas to the city gate These interstate transmission pipelines are regulated by the Federal Energy Regulatory Commission (FERC).

3. Local Gas Utility Delivery Charges

 

Natural gas is delivered to the customer by a local gas utility company. This transportation/distribution charge is a variable charge varies based on the customer's usage.