Cutting edge: Hedging price and volumetric risks of fixed-price load-serving contracts in natural gas markets

Cutting edge: Hedging price and volumetric risks of fixed-price load-serving contracts in natural gas markets

Natural gas meters

With the deregulation of the natural gas industry over the past 20 years, local distribution companies (LDCs) in many US states have been exploring and instituting retail choice programmes. These initiatives allow natural gas end-users to purchase natural gas from competitive marketers. Natural gas marketers and other load serving entities (LSEs) usually offer two forms of price plans – competitive fixed and variable price plans. Increasingly, risk-averse retail customers choose fixed-price plan