Definitions, Sources and Explanatory Notes

 Category:   Natural Gas Prices
 Topic:   Residential and Commercial Prices by Local Distributors & Marketers


Key Terms Definition
Commercial Price The price of gas used by nonmanufacturing establishments or agencies primarily engaged in the sale of goods or services such as hotels, restaurants, wholesale and retail stores and other service enterprises; and gas used by local, State and Federal agencies engaged in nonmanufacturing activities.
Local Distribution Company (LDC) A legal entity engaged primarily in the retail sale and/or delivery of natural gas through a distribution system that includes mainlines (that is, pipelines designed to carry large volumes of gas, usually located under roads or other major right-of-ways) and laterals (that is, pipelines of smaller diameter that connect the end user to the mainline). Since the restructuring of the gas industry, the sale of gas and/or delivery arrangements may be handled by other agents, such as producers, brokers, and marketers that are referred to as "non-LDC."
Marketer (of Natural Gas) A company that arranges purchases and sales of natural gas. Unlike pipeline companies or local distribution companies, a marketer does not own physical assets commonly used in the supply of natural gas, such as pipelines or storage fields. A marketer may be an affiliate of another company, such as a local distribution company, natural gas pipeline, or producer, but it operates independently of other segments of the company. In States with residential choice programs, marketers serve as alternative suppliers to residential users of natural gas, which is delivered by a local distribution company.
Natural Gas A gaseous mixture of hydrocarbon compounds, the primary one being methane.
Nominal Price The price paid for a product or service at the time of the transaction. Nominal prices are those that have not been adjusted to remove the effect of changes in the purchasing power of the dollar; they reflect buying power in the year in which the transaction occurred.
Residential Price The price of gas used in private dwellings, including apartments, for heating, cooking, water heating, and other household uses.

For definitions of related energy terms, refer to the EIA Energy Glossary.


Local Distribution Company Price:  Form EIA-176, "Annual Report of Natural and Supplemental Gas Supply and Disposition" .

Marketer Price:   Form EIA-910, "Monthly Natural Gas Marketer Survey"

  Explanatory Notes

  • Prices are in nominal dollars.
  • Prices represent the annual-average retail price for volumes delivered to residential and commercial customers by marketers who report on EIA-910, "Monthly Natural Gas Marketer Survey" and local distribution companies who report on EIA-176, "Annual Report of Natural and Supplemental Gas Supply and Disposition". Both sets of prices include the cost of the gas commodity/supply and all transportation and delivery charges. Since the prices reflect each State’s aggregate of multiple local distribution companies and marketers, a comparison of the aggregate prices may not represent the realized price savings that an individual customer might have obtained. Localized tariff rates, distinct contract/pricing options, and contract timing may affect the price differential between marketers and licensed distribution companies. Additionally, the 2005 hurricane season may have affected future contract offerings beginning in 2006 as prices rose sharply during that period.