LDC Supply Portfolio Management During the 2018-19 Winter Heating Season (December 2019)
The U.S. natural gas market balanced supply and consumption at about 75 Bcf per day on average during 2018. However, requirements for natural gas by consumers – and particularly during the winter heating season – can fluctuate significantly above or below the average.
This Energy Analysis details the critical elements of the 2018-2019 winter heating season (WHS) from the perspective of natural gas utility supply portfolio planning. The information in this analysis originates from data collected from AGA member local distribution companies (LDCs) through the AGA LDC Winter Heating Season Performance Survey. The survey questions focus on peak-day and peak-month supply practices, pricing mechanisms, regulatory frameworks, and market hedging practices – acknowledging that each winter heating season may be unique or exceptional in many ways.
This report documents gas delivery system operations of the surveyed local gas utilities during the 2018-2019 winter heating season and helps provide insights into gas supply trends and procurement portfolio management. It represents a snapshot of aggregated supply procurement practices of those companies that participated in this survey.
The participating companies planned for a peak-day of 61.3 billion cubic feet (Bcf), however, they only ended up sending out 53.9 billion cubic feet (Bcf) for their aggregate peak-day. Their pro-active planning allowed for a 12% buffer in case of emergencies and colder-than-normal polar vortex days, through strategies including:
- Filling Storage Inventories Earlier
- Using A Diverse Array of Supply Resources
- Staggering Pricing Mechanisms
AGA would like to thank the members for participating in this important data-collection effort. We tremendously appreciate the time and effort given by all survey respondents throughout the information gathering and validation process.
Underground natural gas storage is a valuable physical tool that utilities employ for managing sudden changes such as weather-induced demand, in order to regulate reliability and keep customer prices affordable.
Changes in natural gas requirements are met with a package of supply tools, illustrated below, to address the ongoing challenge of meeting customer requirements each day of every winter, especially on the highest consumption days or polar vortex circumstances.
Please direct inquiries to:
Morgan Hoy, Senior Market and Regulatory Analyst, Energy Efficiency, Energy Analysis and Standards