Choosing
a Natural Gas Supplier
GENERAL
QUESTIONS
How does the program work?
Basically, there are three costs that
make up the your total natural gas bill:
- the
cost of natural gas at the
wellhead
- the
cost of shipping that gas to
our region
- the
cost of delivering the product
to your home
First,
the cost of natural gas at the
wellhead makes up about a third
of a customer’s annual
bill. Natural gas is a deregulated
commodity purchased by utilities
for use by their customers. Natural
gas is purchased at the wellhead
at a price that is determined
by the marketplace, or in economic
terms, by the law of supply and
demand. Utilities must pass the
cost directly to customers without
mark-up or profit. This is the
portion of the bill on which
a customer’s choice of
gas supplier may impact the total
price they pay.
The second component is the cost of shipping gas from the well to our
area through interstate pipelines--a third of your total bill.
The final component of your bill is National Fuel’s cost to deliver that
gas to you through our pipelines. This includes the cost of our pipeline, labor,
materials and taxes. The cost of gas delivery accounts for about
a quarter out of every dollar consumers pay National Fuel. Federal and state
taxes make up the remainder.
A change you will see now is that an energy "supplier" will
be responsible for acquiring the gas from one or more gas producers. The
physical movement of the gas remains exactly the same. The change that
you will notice will be whom you will pay for your natural gas.
How
will supplier choice affect
what I pay?
The supplier choice plan
will affect the cost of gas component
of your gas bill. Various gas suppliers
will "compete" to sell
their gas to customers at different
prices. This concept is not new.
This opportunity has been available
for more than ten years for National
Fuel’s major commercial and
industrial customers and has provided
these customers the ability to
save on their fuel costs.
Now "choice" is available to virtually all of National Fuel’s
customers. You will be free to purchase your gas supply from a
qualified gas supplier. The supplier will add the gas you have purchased to
the National Fuel system to be delivered to your household or business.
The rate National Fuel charges for natural gas is set by the New York State
Commission and the Pennsylvania Public Utility Commission, based on a
formula mandated by law. Rates charged by gas suppliers are not regulated,
so they can set their prices differently.
Natural gas
suppliers are also able to offer you options that we as a utility cannot. For
example under supplier choice, you might be able to lock in your gas price
for a year, or buy your gas on a seasonal basis rather than monthly. They may
offer different rates to different types of customers.
Does supplier choice replace
the utility, National Fuel?
No. Regardless of whom
you choose to supply your gas,
National Fuel will still deliver
it to your home. National
Fuel will continue to be responsible
for our extensive pipeline system.
We will maintain it as we always
have.
Will
this save customers money?
This depends on the supplier
you choose and the program the
supplier offers. Some suppliers
may offer a flat rate for a certain
amount of gas. Others may offer
guaranteed savings or package incentives.
Just remember that gas prices fluctuate
in a competitive market, so the
amount of your total savings might
vary over time depending upon your
supplier's plan.
Do
I have to make a choice?
No. Participation in supplier
choice is voluntary. If you don't
choose a supplier, National Fuel
will continue to provide your gas
at the current regulated rate.
What
if I want National Fuel to
continue as my supplier?
You don't have to do a
thing. If you do not wish to choose
an alternate supplier, we will
continue to purchase and deliver
gas for you just as we always have.
You don't have to notify anyone
of your decision.
Why
can't National Fuel give me
lower rates and keep things
as they are?
We always purchase gas
at the best possible price while
ensuring reliable supplies. We
sell the gas to our customers
without mark-up
or
profit. Thus,
this
program
does not affect our net income
or profitability.
The natural gas industry has been in a state of transition for the past two
decades. After federal wellhead price controls led to natural gas shortages
in the 1970s, the price of natural gas was deregulated gradually to encourage
drilling for gas. Since 1983, when most prices were deregulated, the price
of natural gas has followed the forces of supply and demand.
For the most part, this has resulted in ample supplies of natural gas at competitive
prices. In 1984, National Fuel became a pioneer in local gas transportation
when we opened our pipelines up to the largest, non-residential customers who could purchase
gas directly from local gas producers, and simply pay the utility a fee to
deliver it. Gas deregulation continued nationwide by opening access to the
interstate natural gas pipeline industry. Pipelines no longer bought and sold
gas; they simply delivered the gas for a fee.
How
can marketers have different
prices if the gas is flowing
through the same lines?
You and your supplier
will determine the price of the
gas. Marketers and suppliers are
not subject to the same regulations
as the utility.
Is
the quality of gas the same?
Yes. All suppliers will
be required to meet all the same
standards for quality and heating
value. They must put an adequate
amount of gas to serve their customers
into National Fuel's lines. The
gas will be mixed together in our
lines. Suppliers will be required
to meet the minimum quality standards
for gas to assure the safety of
our operations.
National Fuel has always been mandated to provide natural gas with a minimum
heating value. Suppliers will be required to deliver gas that meets our quality
standards in order to participate.
How
can National Fuel make a profit
if it does not provide the
gas?
National Fuel earns income
from the transportation and delivery
of your natural gas and related
services we provide, not through
any mark-up on the price of the
gas itself. Charges for these services
are also regulated and are approved
by the utility regulatory commission
in our state.
If
I choose a new supplier, what
services will National Fuel
provide me?
National Fuel will still
be your local gas utility. We'll
read your meter, respond to gas
emergencies, and maintain company-owned
pipelines. Rest assured, we remain
fully committed to providing you
with the best possible service,
whether you purchase your gas from
National Fuel or another supplier.
Will
another gas supplier be as
reliable as National Fuel?
You will always have gas
when you need it no matter which
your supplier is. To be authorized
to participate, the suppliers must
agree to have sufficient gas supplies
for their market and maintain adequate
supply in storage during any period
of the program including the cold
winter months.
Marketers are subject to penalties if their supplies are not delivered. In
the event your supplier fails to deliver your gas, National Fuel will act as
the back-up supplier to ensure your service is uninterrupted.
BILLING QUESTIONS
Who do you pay your bill to?
That depends on the billing option selected by the marketer for your account. Marketers have one of three billing options.
- Utility Consolidated Bill - National Fuel continues to send you one bill with the National Fuel delivery charges and the marketer commodity charges on this bill. Payment is made to National Fuel.
- Dual Billing - National Fuel will bill you for your delivery charges and your marketer will bill you for your commodity charges. Payments are made to both National Fuel and your marketer.
- Single Retailer (Marketer) Bill - Your Marketer will bill you for National Fuel delivery charges and their commodity charges. Payment is made to the marketer. Please note that you will receive a final bill from National Fuel (including any budget billing balance) when you account is transferred to the marketer.
Will I still get estimated bills?
National Fuel will continue to read
meters every other month, so bills may be estimated
every other month except for those customers
with Automated Meter Reading Devices that provide
National Fuel with monthly readings. Customers
may continue to request meter reading cards to
read their own meter for the scheduled estimated
months.
Can I still use National Fuel’s Budget Payment Plan?
That depends on the billing option selected by your marketer. Customers enrolled in National Fuel's Budget Plan at the time of their marketer enrollment will remain in the budget plan for the delivery portion of their bill if their marketer has selected the Utility Consolidated Billing option or the Dual Billing option.
The budget plan option is available for both the delivery and commodity charges when a marketer places your account into a Utility Consolidated Bill group. However you must notify your marketer that you wish to have the commodity portion of the bill included in the budget payment plan.
Customers enrolled in a Dual Billing group will remain in the National Fuel Budget Plan however their monthly payment amount will be reduced by the commodity charges to reflect the fact that the commodity charges will be billed by the marketer.
Customers who are enrolled into a marketer's Single Retailer billing group must check with their marketer to see if the marketer offers a Budget Payment Plan. The National Fuel Budget Plan is terminated at the time the customer becomes active in the marketer;s Single Retailer group.
Can I use Direct Payment Plan?
Again, this depends on how your supplier
bills you. If National Fuel issues the entire
bill, you can remain on Direct Payment Plan.
If the supplier bills for the gas costs, National
Fuel will continue to offer Direct Payment Plan
for our charges. Check with your supplier before
you sign a contract to see if they offer an automatic
payment service, too.
What if I have a dispute?
First, contact the supplier and try
to find a solution. If the supplier fails to
make a good-faith attempt to negotiate or resolve
customer complaints, National Fuel has the right
to terminate the supplier's participation in
the supplier choice program. If a supplier does
not live up to your contract, you can always
switch back to National Fuel. National Fuel will
not terminate or interrupt the delivery of gas
to you as a result of a dispute between you and
the supplier.
What if I fail to honor the agreement
with the supplier?
You should realize that you're signing
a contractual agreement, and you must honor the
terms. Be sure to read the entire contract carefully
to understand your rights to change suppliers
or cancel under reasonable circumstances. Also,
be aware of any cancellation fees that might
apply. Suppliers can terminate the agreement
for non-payment and stop supplying gas to you.
In this event, National Fuel will become your gas supplier, as we are now.
You would then be subject to normal National Fuel payment requirements. If
you have any questions, ask for answers in writing before you sign a contract
with a supplier.
How long do I have to settle National
Fuel’s bill?
If you select a gas supplier other than
National Fuel and if you are unable to pay your
final bill from National Fuel, please call our
offices to arrange a payment plan. We can allow
you some extra time to pay because of these special
circumstances.
Who will get my energy assistance funds?
Your energy assistance payments will
go directly to National Fuel, as they currently
do.
SERVICE QUESTIONS
Who do I call if I have no gas?
For any gas emergencies, your should
still call National Fuel at 1-800-444-3130.
Where do AMD readings go?
Readings from Automated Meter Reading
Devices (AMD) will continue to come to National
Fuel. We will provide your supplier with the
readings, just as we will continue to read meters
for those customers who do not have AMD's. We
will forward those actual readings, too.
Who do I call if I smell gas?
All emergencies, including an odor of
gas should continue to be reported to National
Fuel. We will respond just as quickly as we have
in the past to assure your safety.
Will I need a new pipeline to my house
that is owned by the marketer?
No. National Fuel will continue to deliver
the gas to your home or business through our
existing pipelines. A charge for this service
will be included on your monthly bill from National
Fuel.
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