• Current market prices are one component of a customer’s bill for natural gas service. Customer bills also reflect the price of gas purchased at other points in time, charges to deliver the gas, and the impact of weather (which affects total consumption).
• The U.S. natural gas industry is confident that supplies of natural gas will be adequate again this year to meet customers’ needs throughout the winter heating season of 2004-2005.

	Gas cost facts
	The value of natural gas
	Minimize gas price variations with the budget payment plan or by choosing a fixed rate with another supplier
	What you can do to conserve energy
	National Energy Policy
	What Columbia is doing

Gas cost facts

• The price of natural gas, whether high or low, is controlled by market conditions occurring on a national level.
• Local natural gas utilities, like Columbia, cannot control those market conditions or prices. Columbia Gas of Virginia is allowed a rate of return from the delivery of natural gas and does not benefit from higher or lower natural gas prices.
• We are a distributor, not a producer, of natural gas. We must purchase natural gas from the national marketplace for resale to our customers.
• Columbia passes the cost of gas purchased to consumers on a dollar for dollar basis by the quarterly purchased gas adjustment.

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The value of natural gas

• Natural gas is the consumer's best energy value in 2002, according to the U.S. Department of Energy. In many areas of the country, natural gas will cost less to use this year than other major home energy sources.
• Customers value natural gas for efficiency, comfort, cleanliness, reliability and convenience.
• Natural gas is a "home-grown" fuel. Most (85 percent) natural gas used in the United States is produced in the United States. The majority of the rest (14 percent) comes from Canada.

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Budget customers

• The impact of commodity prices can be balanced through the budget payment plan.
• The impact of gas prices on total winter bills will be lower for budget customers because gas costs are annualized.
• The new budget cycle begins in August, but you can join the budget payment plan at anytime.

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CHOICE customers

• Fixed-rate contracts are unlikely to see any change except due to increased consumption during heating season.
• If your contract is due for renewal, your marketer might renegotiate the rate and terms of your contract to adjust for the lower price it's paying for gas.
• CHOICE customers who also participate in the budget payment plan will see an increase in their budget amount only if their marketer increases their gas cost rate, which will depend on contract terms and pricing plans.
• Learn about CHOICE.

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What you can do to conserve energy

• You can help minimize your winter gas bills all season long by following some simple energy-saving tips. If available in your area, you may want to consider enrolling in Columbia's Customer CHOICE program, which gives consumers the opportunity to save on gas costs by shopping among a variety of suppliers.
• Another option is Columbia's budget payment plan, which spreads winter heating costs over the entire year. You also might want to explore energy conservation measures, such as weatherizing your home, installing a setback thermostat and having your home heating equipment inspected and serviced.

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National Energy Policy

• Our parent company, NiSource Inc., and all NiSource subsidiary companies support the creation of a national energy policy that meets long-term consumer demand for reliable energy at reasonable prices, while protecting the environment.
• Conservation alone won't solve this issue long-term. Consumers want Congress to tackle the tough trade-offs and prepare for increasing energy needs.

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What Columbia is doing

• Columbia Gas has worked hard to assemble a natural gas portfolio that offers the most reliable supplies at the lowest prices possible. Columbia is confident of its ability to meet the gas supply needs of our customers.
• Columbia buys its natural gas from a number of sources to ensure adequate supplies at best possible prices.
• Our service and delivery rate has remained the same since 1998.
• While Columbia Gas strives to provide reliable, low-cost gas service, the market determines the price that all natural gas distribution companies pay for natural gas supplies. This cost is passed on to the customer without any markup or profit margin.

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More information
To learn more about the natural gas marketplace trends and outlooks, and other information about the natural gas industry, visit the American Gas Association Web site.

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