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One thousand (1,000) Cubic Metres of gas.

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The process by which several smaller gas customers are grouped together under a supplier to meet the minimum consumption requirement.

Buying a futures month on one exchange and selling the same month on another Exchange by buying both sides involving the same commodity.

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Movement of gas from a Point of Receipt to a Point of Delivery such that the contractual direction of movement on the mainline is at all times and at all points along the path in a direction opposite to the design flow of gas in the pipeline.

The matching of gas deliveries with actual consumption over a defined time period.

The part of a gas buyer's gas needs that are relatively predictable. Or, the minimum amount of electric power delivered or required over a given period of time at a steady rate. Definition differs from company to company and region to region.

The difference between cash and future prices in hedge. Formula: Cash - Futures = Basis.

Basis or Spread Risk
The risk that the basis will change over the life of the hedge. The risk is referred to as basis risk when it arises in the context of an imperfect hedge, and as spread risk when the risk is willingly taken on.

Bid Week
The period of time, up to 7 trading days, near the end of the month where cash deals are registered for the coming month's natural gas flows. Coincides with the expiration of the NYMEX spot futures contract.

BTU (British Thermal Unit)
One Btu is the quantity of heat necessary to raise the temperature of one pound of water one degree Fahrenheit. One Btu equals 252 calories, 778 foot pounds, 1,055 joules or 0.293 watt hours. For your home, it represents the measure of heat given off when fuel is burned for heating or the measure of heat extracted from your home for cooling.

Bundled Service
Providing a unit of gas to the customer at a price that includes the cost of gas and all associated transportation, balancing and storage costs.

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The volume of gas which can be moved through the pipeline or stored in a storage facility over a period of time. The amount pipeline capacity reserved for a customer is determined by contract.

Carrying Charge
The cost of storing natural gas for a period of time.

Cash Market (Or Physical Market)
The market for a cash commodity where the actual physical product is traded.

City Gate
The transfer point at which upstream pipelines connect to the Natural Gas distribution system (i.e. Union Gas, Enbridge Consumers Gas, St. Lawrence Gas).

Commodity Charge
That portion of a natural gas rate or seller's price based upon the volume of gas actually transported or purchased.

Contract Demand
The maximum daily, monthly or annual quantity which the supplier agrees to furnish or the pipeline agrees to transport, and for which the buyer or shipper agrees to pay a demand charge.

A reduction in gas delivery service or sales lower than the agreed upon contracted level.

Curtailment Policy
A policy for reducing natural gas service to designated customers when there is insufficient gas supply or transportation capacity to meet demand typically associated with firm transportation service.

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DCQ (Daily Contract Quantity)
The daily amount of gas necessary to meet the annual amount of natural gas consumed by a customer. The DCQ is equal to an energy consumer's annual requirements divided by the number of days in the year (365 days).

Dawn Hub
Canada’s largest underground natural gas storage facility located in Lambton County (near Sarnia, Ontario).  Dawn is one of the fastest growing storage and transmission hubs in North America.

Degree Day
A measure of the cold weather based on the extent to which the daily average temperature falls below a reference temperature, usually 65 degrees Fahrenheit.

Dekatherm (Dth, also equals MMBtu)
A unit of heat equal to 1,000,000 Btus (1MMBtu); the thermal equivalent of 1,000 cubic feet of gas with a heat content of 1,000 Btus per cubic foot.

The volume of gas a well, field, pipeline or distribution system is able to supply natural gas within a given period of time.

Delivery Point
The physical point at which the seller delivers natural gas to the buyer.

Demand Charge
Applicable to the gas or electricity markets, a price set based on reserved capacity or measured demand, regardless of energy delivered. Demand Charge is also known as Capacity Charge.

The process of modifying or ending government (Federal, Provincial and/or Municipal) control over how and at what price natural gas is sold.

Direct Purchase Agreement
A legally binding commitment to buy natural gas through an independent energy marketer acting to purchase physical natural gas supply.

Dual Fuel Capability
A customer's ability to convert to another source of fuel on short notice i.e. electricity, natural gas, oil, coal, wood, waste fuel)

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Firm Capacity
Upstream pipeline capacity reserved to meet customer'saverage day needs. Firm capacity may be classified as either recallable or non-recallable. Non-recallable capacity cannot be interrupted. Recallable capacity may lose its "firmness" at some point in time and could be interrupted.

Firm Delivery
A term used in the sale of gas to denote an absolute obligation on the seller to deliver gas and the same obligation on the buyer to accept delivery of an agreed upon quantity of natural gas.

Firm Service Contract
A type of contracted service where the natural gas distributor agrees to provide the buyer with uninterrupted distributed supply of gas. This type of contract is usually more expensive, and is used primarily by firms unable to risk the loss of fuel for any period of time.

A process to estimate a customer's future consumption needs for some future time period.

The service territory within which the Natural Gas utilities have been permitted to operate.

Futures Contract
An exchange traded contract generally calling for delivery of a specified amount of a particular grade of commodity or financial instrument at a fixed date in the future.

Fuel Gas Ratio
The quantity of gas required by the pipeline to transport Customer's gas. The Fuel Gas ratio is determined by multiplying the total nominated quantity of gas to be received at each Point of Receipt by the Fuel Retainage Percentage.

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Gigajoule (GJ)
A joule is an international unit of energy defined as the energy produced from one watt flowing for one second. Power - 3-6-mil joules in a kilowatt-hour. Gas - one Gigajoule (GJ) = 0.96 Mcf under standard temperature and pressure conditions. One Gigajoule (GJ) = 1 Mcf.

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Used to reduce risk by taking a financial derivative position offsetting an existing or anticipated future change in a physical market.

Henry Hub
A pipeline interchange near Erath, Louisiana, where a number of interstate and intrastate pipelines interconnect through a header system operated by Sabine Pipe Line. It is the standard delivery point for the NYMEX natural gas futures contract in the United States.

Location where pipelines intersect enabling the trading, transportation, storage, exchange, parking or loans of natural gas.

Hub or Hub Services
Facilities or services offered by an operator at a point or points where several pipelines or storage facilities connect. These services include transportation, short and long term storage, parking, balancing and title transfers.

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Imbalance Trading
A process by which gas customers can acquire gas from, or sell gas to, other customers to minimize or avoid Cash-out. One would want to reconcile their actual gas usage through imbalance trading first. The intent of imbalance trading is to balance gas deliveries with gas consumption.

Incremental Costs
Costs incurred to procure an alternate supply of gas when the other party has failed to purchase/sell the physical product. These costs may include the cost of the gas itself, as well as additional gathering/transportation costs and, in the case of an EFP, the cost to liquidate open futures contracts.

Index Price
A price usually obtained from an industry publication that is intended to represent an average price of gas/power delivered to a specific location, or during a specified period of time.

Interruptible Service
Interruptible service contracts allow a distributing party to temporarily suspend delivery of gas to a buyer in order to meet the demands of customers who purchased firm service. Interruptible service is less expensive than firm service, and is used by customers who can either accommodate interruption, or switch to alternative fuels temporarily.

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Load Factor
The average load of a customer, a group of customers, or an entire system, divided by the maximum load. Can be calculated over any time period. For example, assuming 3650 GJ of gas usage over a year, the average daily load is 3650/365 or 10 GJ. If the peak day load or maximum demand was 20 GJ, the load factor is 50%.

Local Distribution Company (LDC)
A company which provides the distribution service from the city gate to customer premises. Union Gas, Enbridge Consumers and St. Lawrence Gas are LDC's.

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Market-Based Rates
Rates set, by class or individually, against the price of the next available competitive alternative.

A unit of heat equal to one million British thermal units.

A unit of volume equal to one million cubic feet.

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National Energy Board (NEB)
The Canadian regulatory body which oversees inter-provincial natural gas policy.

Natural gas
Naturally occurring gas, predominantly methane, but usually containing some proportions of ethane, propane and butane. It is found in porous geological formations beneath the earth's surface, often in association with petroleum.

The process of scheduling gas deliveries to an LDC per delivery point.

Nomination/Delivery Control
The process, by which a customer's gas needs are defined, communicated, scheduled and monitored via a collaborative effort by customer's supplies and the natural gas utilities.

New York Mercantile Exchange. Also known in the energy industry as "the Merc".

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OEB (Ontario Energy Board)
A regulatory tribunal which regulates the natural gas and power utilities, pipelines and marketers in-kind in the province of Ontario. The OEB also provides advice on energy matters referred to it by the Government of Ontario.

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Peak Day
The date an end user's gas requirements reach a maximum level.

Peak Shaving
Using sources of energy, such as natural gas from storage, to supplement the normal amounts delivered to customers during peak-use periods. Using these supplemental sources prevents pipelines from having to expand their delivery facilities just to accommodate short periods of extremely high demand.

Removing excess moisture and erroneous hydro-carbons from the natural gas to a point where it is deemed suitable for transport on the pipeline.

A natural gas producer is generally involved in exploration, drilling, and refinement of natural gas. There are independent producers, as well as integrated producers, which are generally larger companies that produce, transport and distribute natural gas.

The process of removing natural gas supplies from a producing gas well and introducing it into a pipeline or gathering system.

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Receipt Point
A transporter delivering gas to an agreed upon point on a pipeline system.

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Service Agreement
The contract between a customer or supplier and the natural gas utility which specifies the service provided, and the responsibilities with respect to a particular tariff.

Service Classification
The identification code assigned to identify a type of customer service as defined by the tariff.

A one-time open market cash transaction where a commodity is purchased "on the spot" at current market rates.

Spot Market
A generic reference to short-term purchases and sales of natural gas. A product of deregulation, the spot market is a method of contract purchasing whereby commitments by the buyer and seller are of a short duration at a single volume price. The duration of these contracts is typically less than a month, and the complexity of the contracts is significantly less than their traditional market counterparts.

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The document typically used by transporters defining the terms and conditions of service as filed and approved by a Government Regulated Agency.

Transition Costs
Costs being passed on to utilities from interstate pipeline companies as a result of the federally-mandated restructuring of the natural gas pipeline industry.

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Unbundled Service
The separation of services, such as transportation, storage and gathering, with rates charged that reflect cost of each service.

Underground Storage
The injection of large quantities of natural gas into underground rock formations for storage during period of low market demand and withdrawal during periods of high market demand.

Upstream Transportation Capacity Allocation
The process of assigning a quantity of pipeline capacity to individual customer to meet their peak day requirements.

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WACOG (Weighted Average Cost of Gas)
The formula used by pipelines, utilities and other sellers to determine the cost of gas underlying their sales rates. It is the total cost of all natural gas purchased during a base period, divided by either the total quantity sold, or system throughput during an equal period of time.

Weather Normalization
A clause in utility rates which adjusts customer costs to reflect normal temperatures. If temperatures during the measured period are warmer than normal, customers receive a surcharge. If temperatures during the measured period are colder than normal, customers receive a credit.

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A way a pipeline differentiates between different areas on their pipeline systems. Each pipeline system has a field zone and a market zone. Gas may be delivered into the pipeline's field zone and taken out of the system in market zones.

Zone Rate
A transportation service rate where costs for transportation are set based on the zone or number of zones through which gas travels under a particular transaction.