Gas Transportation Frequently Asked Questions

To help you understand our gas transportation services, we have provided a list of frequently asked questions. If your questions have not been answered, please submit contact us to submit your question.

Q: What is Natural Gas Transportation?

A: Under gas transportation, you will have the option of purchasing your supplies from Columbia Gas or from an alternative gas supplier. Columbia will continue to deliver the natural gas to your facility, but the purchase function will be handled by the company of your choice. This method of natural gas purchasing is similar to the telecommunications industry where you choose a long distance provider.

Q: Why Would I Buy My Gas From Someone Other Than Columbia?

A: There might be an opportunity to save money on your gas costs. Alternative gas suppliers are not subject to state utility commission pricing regulations and can price their gas supplies differently than Columbia.

Under federal and state regulations, gas costs are passed through to all sales customers on an average basis, dollar-for-dollar. Neither the pipeline nor Columbia are permitted to "mark-up" gas costs. Columbia derives its income from the delivery of gas through its distribution system to both sales and transportation customers. You are our customer whether you purchase traditional sales service or choose to transport.

Q: What Is Included The Cost Of Your Natural Gas Service?

A: 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 Gas 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 the 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 a transportation program, you are essentially substituting the cost you pay your supplier for gas, the commodity cost, for Columbia's commodity cost. Transportation costs remain the same, as do the costs associated with the distribution service.

You also have the potential for additional savings if you tailor the level of service reliability and reduce the fixed charges to your specific needs.

Q: How Do I Sign Up For Gas Transportation?

A: Choose a supplier. You can contact the office shown on your bill for our Marketer Referral Booklet or check your local Yellow Pages under Gas Companies.

Your chosen supplier will forward the necessary paperwork to you for your approval. This will include a Service Agreement between you and Columbia Gas, detailing your service options, volume requirements, service address and account contact information, and the name of your supplier. You may also be required to execute an agreement with your supplier.

You or your supplier are responsible for returning the Service Agreement to Columbia for further processing.

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

A: Absolutely, 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.

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

A: Cost savings vary from supplier to supplier. This is something you would need to discuss in detail with any suppliers you are considering.

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

A: 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.

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

A: As long as your supplier arranges delivery from the well to our distribution lines, we will deliver it to you from there.

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

A: 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. Our income is derived from the delivery of gas to our customers, and that is not affected by who supplies the gas. Columbia keeps you as a customer whether you purchase traditional sales service or choose to transport.

Q: Will I get two bills - one from the supplier and one from Columbia?

A: You may receive two bills. Your Columbia bill will reflect the cost of delivering the gas to your facility or "transportation charges." This could include gas Columbia must supply if your supplier delivers less gas than what you actually use. The other bill would be from your marketer (supplier) for the cost of the gas delivered to Columbia on your behalf. Some marketers offer a bill-consolidation service allowing you to receive only one bill. This is something you may want to investigate further with potential suppliers.

Q: 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?

A: The possibility does exist. There are safeguards, however, if you feel you would like to take advantage of them. You can contract with Columbia to have gas available to "back you up" in such instances. You may also install an alternative fuel. We suggest you talk to your local Columbia Gas Representative as well as any potential supplier about these options.

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

A: Columbia may provide you gas under our normal system supply rate schedules provided that:

• your return to system supply does not negatively impact the rate non-transportation customers pay, and
• you are willing to absorb any increased costs caused by your return to sales service.

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

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

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

A: Once you have chosen a supplier (you may contact the Columbia Gas office shown on your bill for a Marketer Referral Booklet or refer to the Yellow Pages for a list of gas marketers), that supplier will provide you with the necessary paperwork to participate in the program. It will include, in addition to a Supplier Agreement, a Service Agreement with Columbia Gas. We will set you up for transportation once we receive the Service Agreement and all of the necessary information from you or your supplier.