Business Customer Update - September 2016

As a Unitil business customer, you should be aware that beginning on November 1, 2016, several changes impacting customers who purchase their natural gas from a retail marketer will go into effect. 

While Unitil is always your natural gas distribution company, business customers have the option to buy their gas from retail marketers at privately negotiated prices rather than from Unitil.  When you purchase from a marketer, the marketer acquires gas for you and transports it to Unitil’s system in Maine, and Unitil delivers the gas through its distribution system to your facilities.   

In addition to providing distribution service in Maine, like most distribution companies in New England, Unitil acquires natural gas capacity resources, including transportation on interstate pipelines, space in underground storage facilities and peaking capacity that allow Unitil to purchase gas from other regions of the country and to meet demand on cold days.

In most cases, when a customer buys gas from a marketer, Unitil allocates, or “assigns”, a share of its capacity and associated costs to the marketer in an amount that is related to the customer’s peak day usage.  Some customers, who have never purchased supply from Unitil, are exempt from this capacity assignment. 

The changes relative to capacity assignment and purchasing gas supply from retail marketers being implemented on November 1, 2016 include the following:   

• Under current rules, the amount of capacity assigned to a marketer for each customer is set when the customer begins buying from the marketer and is never updated unless the customer chooses to buy gas from Unitil and then later returns to purchasing gas from a marketer.  Starting this year, each customer’s capacity amount will be reviewed annually and updated each November 1 if the customer’s peak day demand has changed by more than 5 percent since it was last set. 

• Currently, the amount of capacity assigned to a marketer is based on 50 percent of its customers’ expected peak day usage.  Beginning November 2019, the amount of capacity assigned to a marketer will be based on its customers’ peak day usage relative to the amount of capacity Unitil holds.  In this way, each customer subject to assignment or served directly by Unitil will receive a share of Unitil’s capacity that reflects their portion of demand on a peak day.

• Under current rules, when customers stop buying their supply from a marketer and begin buying from Unitil, they are required to continue purchasing from Unitil for 12 months, a period known as the “stay period”, before they can return to purchasing their gas supply from a marketer.  Starting in November of this year, customers who stop buying from a marketer and revert to Unitil for supply must remain on Unitil supply through the end of the winter period, which is April 30. 

• Currently, a “re-entry” fee is charged to customers who stop buying gas from a marketer and begin buying from Unitil.  The current fee does not vary with usage.  Starting in November 2016, customers who revert to Unitil for supply will pay a usage based surcharge that reflects the additional cost, if any, of the supply to serve such returning customers.  The surcharge will be in addition to Unitil’s standard cost of supply.  This surcharge will apply only during the stay period, which is through the following April. 

You may contact a marketer or an energy broker for guidance on your supply purchasing options and decisions.  The Maine Public Utilities Commission maintains a list of active, licensed retail natural gas suppliers and brokers here.  You may also contact Unitil Customer Service at (866) 933-3821 for further information. The Maine Public Utilities Commission has approved the content of this message.