Understanding your natural gas pricing
Your monthly natural gas bill consists of several components. Understanding these elements puts you in a position to set smart energy goals and pick strategies to meet them.
- Energy – This reflects the price of natural gas traded on the NYMEX. Prices fluctuate daily based on supply and demand, production costs, weather, and broader economic factors.
- Basis – This covers the transportation and distribution of gas from production to end-users, including pipeline and local fees. Factors like distance and regional infrastructure can influence these charges.
- Additional Components – Other charges may include storage fees, pipeline adjustments, and regulatory surcharges, which can vary by region and are typically beyond the supplier's control.
Most popular strategies
- All-In Rate – Lock in price certainty with a steady rate through the duration of your term.
- NYMEX Plus – Your energy costs float with the market, while all other costs are locked in.
- Regional Index Plus – Your energy costs and basis (transportation charge) float with the market, while all other costs are locked in.
- Partial Fixed – Strategically hedge portions of your natural gas throughout the year based on the market.
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