Natural Gas Loads

Since the nation requires more natural gas (and other fuels) in the winter, the laws of supply and demand usually drive up costs in the winter. In addition, the coldest months set the peak requirements for production and distribution facilities and, therefore, most of the fixed costs for the entire industry. Allocation of these fixed costs to natural gas purchased in this period also drives up the cost of winter gas.

Conversely, in the non-heating season months, when demand is lower, natural gas is less costly. In addition, because fixed costs are mostly allocated to winter gas supplies, non-winter gas gets somewhat of a free ride and is tied primarily to a variable cost already driven down by lower demand. To the extent that some fixed costs can be recovered through (or spread over) non-winter gas sales, LDCs and pipelines benefit by building their system load factor by increasing non-winter sales. LDCs in regions with moderate climates or where industrial process demand greatly exceeds heating demand will typically have higher load factors and experience a lower differential between winter and non-winter costs. The national effects of supply and demand as a whole, however, will still affect costs in these regions.

Renewable Energy 101

Renewable Energy 101

Renewable energy is energy that is generated from sunlight, rain, tides, geothermal heat and wind. These sources are naturally and constantly replenished, which is why they are deemed as renewable. The usage of renewable energy sources is very important when considering the sustainability of the existing energy usage of the world. While there is currently an abundance of non-renewable energy sources, such as nuclear fuels, these energy sources are depleting. In addition to being a non-renewable supply, the non-renewable energy sources release emissions into the air, which has an adverse effect on the environment.

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