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Today in Energy

May 20, 2011

Non-utility marketers provide over 20% of residential natural gas load in three States

Source: U.S. Energy Information Administration, Natural Gas Annual

Retail choice programs let electric power and natural gas customers choose among competitive suppliers in some States. Today we examine natural gas retail choice programs, which. They served more than 20% of customer needs in Georgia, Ohio and New York in 2009 and were available in 18 other States and the District of Columbia. Recent articles discussed the status of electricity retail choice programs (May 18, 2011 and May 19, 2011).

Georgia shows the highest percentage of natural gas sold by marketers to retail choice customers–averaging over 85% of total deliveries since 2000. Starting October 1, 1999, all residential natural gas customers (approximately 1.5 million) in the Atlanta Gas Light Company's service territory were required to purchase supply directly from marketers; they could no longer purchase natural gas directly from the utility.

Although Ohio's retail choice participation levels are lower than those in Georgia, still over 53% of natural gas sold to residential customers in 2009 was from marketers. Boosting this participation level is the State's allowance of communities and organizations to purchase gas through aggregated groups. Local governments may choose an "opt-in" or "opt-out" aggregation program in order to leverage the combined buying power of multiple customers. An opt-in program requires that customers sign up if they wish to participate, while the opt-out program includes all customers in the community unless they actively choose not to participate. (In either case, the local governments in Ohio must adopt an ordinance or resolution to create the programs—opt-out programs that must be approved by local vote.)

Participation in New York's retail choice program has grown since 2000, reaching nearly 23% of residential natural gas deliveries in 2009. In part, this growth has been stimulated by the active role the New York Public Service Commission (NYPSC) has taken in encouraging retail choice. The NYPSC has streamlined the licensing requirements for marketers, held "energy fairs" that provide customers with information on natural gas choice, and have created a website to provide customers with supply option information.

Participation in other States and the District of Columbia has been low.