Natural Gas Glossary of Terms
BALANCING
The process of equalizing an LDC’s receipt of gas into a pipeline with withdrawals by suppliers out of a pipeline system. This can be done daily, monthly or seasonally.
BTU (BRITISH THERMAL UNIT)
The quantity of heat required to raise one pound of water, one degree Fahrenheit.
BUY AT MARKET ORDER
A buy order at the current market offer price for a specific volume and month. Buy at market orders are immediately executed at the best current market offer obtainable. This type of order gives the customer the flexibility to take advantage of current market pricing or stop themselves out in real time.
CCF
A common unit used for measuring natural gas volume. 1 CCF = 100 cubic feet = 102,500 BTU’s.
CGA (COST OF GAS ADJUSTMENT)
The mechanism by which a utility periodically adjusts its prices in order to compensate for changes in the gas acquisition costs.
CITY GATE
Physical location where gas is delivered from an interstate pipeline to a local distribution company (LDC).
COGENERATION
The sequential production of electricity and useful thermal energy from a non-electrical energy source.
CUBIC FEET (CF)
A common unit used for measuring natural gas volume. 1 CF equals roughly 1,000 BTU’s.
CCF
1 CCF = 100 CF.
DECATHERM (DTH)
1 DTH = 10 therms = 9.75 CCF.
DEREGULATION
Opening a market to competition, whose prices and practices were formerly fully regulated by government.
DISTRIBUTION
Local pipeline delivery of natural gas.
DUAL-FUEL
The ability for a facility or a piece of equipment to use more than one kind of fuel, usually gas and oil.
FIRM SERVICE
The highest quality sales or service offered to customers – no planned interruption.
INTERRUPTIBLE SERVICE
Gas service that is subject to interruption at the option of the pipeline or LDC.
INTERSTATE PIPELINE
A federally regulated company engaged in the business of transporting natural gas across state lines from producing regions to end use markets.
LDC
Local Distribution Company, also commonly referred to as the local utility company.
LINE LOSS
Describes the effect by which a measurable percentage of natural gas is lost or unaccounted for as it traverses pipelines before it is delivered to the end consumer.
LNG
Liquefied Natural Gas. Natural gas converted to a liquid state, usually for storage purposes, by pressure and severe cooling.
MCF
A common unit used for measuring natural gas volume. 1 MCF = 1,000 cubic feet.
NYMEX
The New York Mercantile Exchange is the world’s largest physical commodity futures exchange. When used in a natural gas supply contract, NYMEX refers to the price of a natural gas contract at a specific point in time.
PUBLIC UTILITY COMMISSION (PUC)
The state agency that typically regulates the sale of electric and natural gas utilities.
RATE CLASS
An LDC’s billing classification or category.
SPOT GAS
Refers to the ability to purchase natural gas on an interruptible or best efforts basis for specified volumes on a limited basis.
STOP LOSS ORDER
An above-market buy order for a specific price, volume, and month. Stop loss orders can protect a customer from upside price risk in a rising market.
TARIFF
A document, approved by the responsible regulatory agency, listing the terms and conditions, including a schedule of prices, under which utility services will be provided.
TELEMETERING
A form of remote utility metering.
THERM
Unit of measure of heat content, equivalent to 100,000 Btu’s.
TRIGGER ORDER
A below-market buy order for a specific price, volume, and month. Trigger Orders enable customers to take advantage of a falling market.
WACOG
Weighted Average Cost of Gas.