GAS PROCUREMENT
NATURAL GAS - Managing Risk
Natural Gas is not simply an energy source that gets piped into your business, but rather it is a commodity that gets traded on the world’s energy exchanges. It can be impacted greatly by news and current events, causing major fluctuations and volatility in its value. Knowing when to purchase and the type of contract to enter could mean the difference between realizing huge savings, and overpaying greatly.
Fixed Price
A Fixed Price product guarantees a customer a single price for the contracted volume of natural gas over the contract period. Fixed Price products are attractive to customers who want to protect themselves from rising markets or who must meet established budget objectives. Not all contracts are fully bundled, so guidance in this area of energy procurement is especially important.
Indexed Option
A NYMEX plus Basis (indexed) product is designed for customers who wish to purchase natural gas at market prices, but lock in their “basis” (price between NYMEX pricing point and utility city gate). This product is suited to customers who wish to participate in downward markets but ensurestable transportation rates. NYMEX plus Basis works for customers who expect market prices to decline and want to avoid locking in natural gas supplies at current set rates.
Tier Triggering
Tier Triggering allows customers who consume over 10,000 MMBtu per month to take advantage of market lows while providing upward price protection. Tier Triggering is suited for customers who wish to tier their natural gas purchases at preset trigger levels. Since customers can change their triggers, this program provides the flexibility to adapt to changing market conditions
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