Buying natural gas from third party?

Oh Haha · 11-01-2008, 06:04 AM

I had 2 calls this week from salespersons, MX Energy and Interstate Gas, trying to get us to sign up for their programs to "lock in" the rate we pay from Consumers Energy.

I was going to just mess with them as I could tell they were telemarketers by the caller ID. Now, I would like to get the opinion of youse guys.

Have any of you done anything like this and is it just a sales pitch?

Car stuff I know well, natural gas, not so much.

Thanks.

MotoSook · 11-01-2008, 07:45 AM

You buy gas at a set price from them for a period of time. If the market changes you win (gas prices rise)...or you lose (gas prices fall).

Another example....The airlines hedge on jet fuel. Southwest won big during the recent rise in fuel cost. Delta loss big when they tried it several years back.

It's a relatively small part of your household cost. I've never thought it was a good gamble.

Here's nat. gas price trend...

http://www.oilnergy.com/1gnymex.htm

Oh Haha · 11-01-2008, 05:34 PM

Thanks Souk.

I have to say the salesmen were very nice and not pushy at all. I told them I would do some research and then get back with them if I decided to change. I doubt I will make any changes, though.

steve911 · steve911's Garage

Wayne--
Like Souk said. Another thing to consider in your analysis is that even if you switch nat gas suppliers, you'll still need to pay a transportation charge to your local utility - its their distribution system (pipes) that get the gas to your furnace and that part of the cost equation does not go away if you switch suppliers.

Several years ago I switched electricity suppliers here in CA (back when Enron was ******* with the state's power grid). Ended up switching back after a few years - the savings were fairly trivial.

YMMV.

legion · 11-03-2008, 10:39 AM

We can do the same thing around here but the utility jacks up the transmission fees if you do not buy their gas so that it is always cheaper to buy from them.

I can also go on a "budget plan" where I pay the same amount each month. They charge a $5 a month "convienence fee" and there is one month (in the summer) where they settle any difference between budgeted and actual usage. The way I see it, it is a cool $60 in profit for the gas company and I've never heard of anyone getting a refund during the settle-up month.

I can also pre-purchase my natural gas for the year over the summer from my utility. The thing is, it's a losing bet for you either way. If the price during the winter is lower than what you paid, you are locked into the higher amount. I had a friend who did it one year when the price was dramatically higher during the winter, and he got charger a "market fluctation fee". Yep, the gas company effectively charged him the higher price anyway. And I believe there is a "convienence fee" on that plan too.

Your gas company may be different, but read the fine print very carefully. They are not going to absorb a loss just because you bet correctly. In my case, it is way cheaper just to pay the bill as it comes.