- The gas industry has moved from a relatively stable price environment during the early 1980's to the current environment in which there is a great deal of price volatility in the commodity market.
- Although it is not unusual to see a great deal of volatility in gas prices observed in the basic commodity market, prices seen by consumers typically exhibit much less volatility for a number of reasons.
- For residential (and other) customers, stability in transportation and distribution costs (which do not show the same type of variation) tends to offset some of the commodity price variation. Residential consumers usually have the option of further ‘smoothing' in their monthly gas expenditures by participating in a yearly budget plan with their LDC.
- Large-volume gas customers typically have a portfolio of supply contracts and do not rely solely on spot purchases so their total average price tends to vary less than spot prices.
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