The natural gas industry is divided into several segments. Producers drill wells to extract gas out of the ground. Gathering systems link individual wells together to aggregate supply and deliver to pipelines. Interstate transmission pipelines (such as Columbia Gas Transmission, Transco, or Florida Gas Transmission (FGT) transport the gas from gathering systems to local gas utilities. Your local utility delivers the gas to your business.
The price of natural gas from producers is not regulated and fluctuates based upon market forces like inventory levels, weather, and demand. Interstate pipeline transmission services and charges are regulated by the Federal Energy Regulatory Commission. Utilities are regulated by state commissions (PUC/PSC). The charges for services provided by gas marketers are not regulated.
Following the energy crisis in the early 1970’s, regulation of the gas industry changed to promote a greater use of domestic natural gas supplies and reduce US dependence on foreign oil. Prior to deregulation the cost of the gas supply, interstate pipeline transmission and local utility delivery service were heavily regulated. Commercial gas users paid their local utility an all-inclusive or “bundled” price for gas that included supply, interstate transmission and local delivery costs. Consumers had no choice of suppliers – all gas was purchased from the local utility.
In the late 1970’s, the Federal government began to remove the price controls on natural gas supply from producers that had been in effect since the 1930’s. Interstate pipelines were required to allow their customers (utilities and large industrials) to purchase gas directly from producers, instead of the pipelines and pay the pipelines solely for the transportation of the gas to their facilities. More recently, local distribution utilities have offered a similar delivery service to commercial businesses. Consumers have the choice to purchase gas from a gas marketer and pay the local utility only for the local delivery of your gas.
Deregulation separated the delivery of gas through pipelines from the gas supply from producers. Once it was possible for consumers to purchase gas from independent suppliers, gas marketing companies were formed to help consumers buy gas and arrange for interstate pipeline transportation service. The competition between gas marketers has resulted in lower gas prices and the ability for consumers to choose not only their supplier but also to structure agreements that meet their individual gas supply needs.
Marketers have a simple focus. They buy gas and sell it to customers. Utilities do many things, like building new distribution networks and managing the safety of their pipelines. Gas procurement is only one of many things they are expected to do. PESCO’s focus pays off. In most every situation, PESCO can procure and deliver natural gas more economically than the local utility.
It does not cost anything upfront to enroll with PESCO.
In most cases, yes. You will get one bill from your utility and one bill from PESCO. The distribution utility will charge for regulated distribution fees. PESCO will charge for interstate pipeline charges and commodity costs based on the terms of your commercial agreement.
Choosing a marketer is an important choice, and one that saves consumers money. Exact savings will depend on consumption and varies from month to month. PESCO will be happy to provide an analysis of your savings.
PESCO (Peninsula Energy Services Company) is a wholly owned subsidiary of Chesapeake Utilities Corporation. Chesapeake Utilities is a diversified public company (NYSE: CPK) that has been in business for over 100 years.
PESCO has been in business since 1992, and serves thousands of customers in several states.
Bills are created throughout the month based on actual energy consumption from the previous month.
PESCO’s customer invoices are easy to read, and PESCO will provide its customers with example billings upon customer request.
PESCO offers two types of pricing, fixed pricing and floating pricing. Fixed pricing is ideal for people that like to know their energy cost per therm in advance, and fixed price contracts are available for timeframes up to 36 months out. Floating prices are indexed to published benchmark prices, such as the NYMEX Last Day Settle price or Platts’ Inside FERC Index. These prices change once per month reflecting changes in price that occur in the natural gas market.
Your account number with the local utility will not change. In addition to your existing utility account number, you will be assigned a new PESCO account number. You will receive two different bills and these bills will likely come at two different times during the month, based upon the billing cycles of each company.
PESCO can be reached at 855.PESCO.00 for questions regarding PESCO service.