Business

Business

Service Delivery Frequently Asked Questions

What is Delivery Service (DS)?

Under DS, eligible customers have the option of purchasing their natural gas from a supplier. Columbia Gas of Kentucky, Inc. (Columbia) will continue to deliver the natural gas to the customer's facility, but the natural gas purchasing function will be handled by a third-party supplier.

Why would I buy my gas from someone other than Columbia?

There might be an opportunity to save money on your natural gas cost. Suppliers are not subject to state utility commission pricing regulations and can price their gas differently than Columbia.

Under federal and state regulations, gas costs are passed through to all sales customers on an average basis, dollar-for-dollar. Columbia is not permitted to "mark-up" gas costs. Columbia derives its income from the delivery of gas through its distribution system to both sales and delivery service customers. You are our customer whether you purchase traditional sales service from Columbia, or choose to purchase it from a third-party supplier.

What is included in the cost of your Natural Gas service?

First, there's the cost of the natural gas itself. We refer to this as the "commodity cost."

Next comes the "transportation cost." This is the cost of delivering the natural gas from the supplier or producer to the Columbia distribution system. It includes fixed or demand charges to reserve the pipeline capacity needed to transport and store your gas when you need it.

And lastly, we have the "distribution cost." This is the cost of delivering gas to your facility. It includes not only the actual delivery costs, but also such items as pipeline maintenance, system upgrading, meter reading, and billing.

When you enter the DS program, you are essentially purchasing the natural gas or commodity from a supplier of your choice, rather than Columbia. Transportation costs remain the same, as do the costs associated with the distribution service.

How do I sign up for Delivery Service?

First, to join the Delivery Service program a customer must have annual gas usage of not less than 25,000 MCF at any delivery point.

Second, the customer must choose a supplier. To obtain an approved list of participating suppliers, please contact the Transportation Department at 1-614-460-5943 or via email to GTSTeam@nisource.com. Your chosen supplier will forward the necessary paperwork to you for your approval. This will include a Delivery Service Agreement between you and Columbia, detailing your service options, volume requirements, service address, account contact information, and the name of your supplier. You may also be required to execute an agreement with your supplier. Your supplier is responsible for returning the Delivery Service Agreement to Columbia for further processing.

My friend works in a big industrial plant and he tells me that they pay less for their natural gas by buying it from a third-party supplier rather than from Columbia. Is that true?

We do have customers who buy their natural gas from other suppliers and are able to save money by doing so. However, Columbia continues to deliver the gas regardless of who supplies it.

Would I save money if I purchase gas from a different supplier?

Costs vary from supplier to supplier. This is something you would need to discuss with potential suppliers.

Why can another supplier offer natural gas at a lower price than Columbia?

Columbia is a regulated utility required to price gas on an average basis to all customers. We also must include certain fixed charges relative to reliability of delivery. By purchasing gas from another supplier, you can tailor the level of service reliability and your supplier can target particular gas supplies to satisfy your needs.

Will you continue to deliver the natural gas if I buy it from someone else?

As long as your supplier arranges delivery from the well head to our distribution lines, we will deliver the gas to you.

Sounds like I can't lose, but what about Columbia? How will it affect Columbia if I buy my gas from other suppliers?

It will not affect Columbia. In fact, we want you to have the choice of purchasing your gas from other sources. There is no profit for us in the cost of gas; that cost is simply passed along to the customer dollar-for-dollar. Columbia's income is derived from the delivery of gas to our customers, and that is not affected by who our customers choose to purchase their gas from.

Columbia has always been able to supply the natural gas that I wanted and needed. Is there any chance that another supplier might not be as reliable if we have an exceptionally cold winter or other emergency?

The possibility does exist. However, there are safeguards and if you feel you would like to take advantage of them, you may contract with Columbia to purchase "Backup Service" or you may install an alternate fuel source. We suggest you talk to your local Columbia Gas representative as well as any potential suppliers about these options.

If I decide to buy my gas from another supplier and it does not work out, will Columbia take me back?

Columbia may provide you gas under our normal sales rate schedules provided that:

  • Your return to sales service does not negatively impact the rate non-Delivery Service customers pay,
  • You are willing to absorb any increased costs caused by your return to sales service, and
  • You give proper notice per the Delivery Service Agreement and Columbia Tariff.

Changing suppliers is a big decision. What advice can you offer?

Be sure you fully understand any arrangement that you agree to and understand the terms of the agreement you sign.

If I do decide to choose another supplier, what is my next step?

Once you have chosen a supplier, that supplier will provide you with the necessary paperwork to participate and enroll in DS. Columbia will process the contract once we receive the agreement and all of the necessary information from you and/or your supplier.