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 or include the cost of value added services. 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. Whether or not a customer saves money may be something that can only be determined over time. National Fuel provides a Historical Bill Comparison that customers may use to compare rates and bill amounts from their suppliers to those that would have been charged had the customer obtained their supplies from National Fuel.

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.

When I first choose a gas supplier or choose a different gas supplier than I currently have, when will this change become effective? What happens next?

National Fuel will mail you a letter confirming your switch to the gas supplier. This confirmation letter will include an approximate effective date and the name of the gas supplier. Please review the confirmation letter carefully; if the information is correct, you need not do anything. If the information is NOT correct, please contact National Fuel during normal business hours, Monday through Friday, within 5 days of the date the confirmation letter was issued (10 days in New York).

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.

  1. 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.
  2. 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.
  3. Single Retailer (Marketer) Bill (NY Only) — 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. Customers may continue to request a meter reading document so that they can 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 disconnect 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.

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.