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Natural Gas Services program (NGS) is the primary supplier of natural gas in California to the large facilities of State and local governments.
State regulations (from the California Public Utility Commission) require that large users of natural gas (using more than 250,000 therms per year) must get their natural gas from independent gas suppliers and use the gas utility companies only as transportation providers. Many large public sector facilities are in this group and need a reliable and reasonable provider of gas commodity, which can also arrange for gas delivery and price risk management services. NGS is that service.
Participation in the NGS program is voluntary (non-mandated) for State and local agencies. The program is totally funded from fees charged to customers for delivered natural gas -- $.0065 per therm (e.g. a customer using 1,000,000 therms a year would pay NGS $6,500 for its services).
In Fiscal Year 2008/09, NGS provided over 315.5 millions therms (over 2.6% of all the gas used in California) to 175 customers, at a total price of over $247 million dollars. NGS is over 20% of the total budget of DGS.
Natural gas is one of the most volatile commodities traded on the futures market. Uncertainty about future supply and demand factors causes both short and long-term volatility in the price of natural gas. That price volatility poses a significant budget risk to public organizations with fixed yearly utility budgets that use natural gas to deliver vital services as widely varied as prison building operation to natural gas powered public transportation. By monitoring and evaluating the natural gas market, NGS determines when, how much, and for what price, a range of gas market forward purchase structures (futures) should be procured.
Program Benefits:
- NGS services are available to other public sector organizations (state Executive Agencies, UC & CSU campuses, Community College Districts, cities, counties, and Special Districts) on an interagency agreement basis, not requiring a bidding process.
- NGS follows public procurement competitive bidding processes to select and contract with natural gas suppliers for our customers.
- NGS handles all gas supply and delivery arrangements, both with the gas suppliers and the gas utility companies.
- NGS provides bill consolidation and quality control – combining both the gas supply and utility gas transportation costs into a single monthly bill – decreasing administrative and record keeping costs.
- NGS maintains an auditable 'paper trail' for all gas purchases – we understand public audit requirements and have designed our billing and records process to make things go smoothly for our customers when they have to respond to audit information requests.
- NGS offers our customers natural gas information and consulting services – if you have a question or are trying to develop a specialized service, we work with you to get what you need.
- NGS monitors gas infrastructure issues (gas supply reliability) and strategies for curtailment protection (what to do when there is a supply interruption).
- NGS offers customers customized gas supplies, billing and accounting processes.
- NGS acts as an advocate on relevant issues before the California Public Utilities Commission.
Who Can Participate?
Gas procurement services are available to State agencies, the University of California and California State University systems, Community College districts, cities, counties, and special districts. The NGS program is primarily designed to supply gas procurement services to large gas users--facilities that use more than 250,000 therms per year, known as "non-core" services. NGS program customers include:
- University of California and California State University campuses
- Community College Districts
- All Executive Agency non-core facilities
- Special districts: wastewater, transit
- 17 counties and two cities, including:
- City/County of San Francisco
- City of Los Angeles
- County of Los Angeles
Customers can participate in either a Multi-Year or One-Year Contract
Multi-Year Contract:
- Customers commit to up to five years of gas purchases. This allows NGS to provide a long-term risk management portfolio to protect against short-term price spikes. Gas is periodically purchased for future delivery when market conditions appear favorable. Purchasing tools include fixed price gas, price caps and collars, separate purchases of gas commodity and interstate transportation (basis), and options. Pool gas not pre-purchased is bought at market index prices. Market prices are extremely volatile. Market tools and strategies are used to reduce volatility and make it easier to predict budget needs.
One-year Pool Contract
- Uses the same techniques as the multi-year, but with risk management limited to future purchases of no more than one year - for organizations not prepared to make a long-term commitment.
Contact Us:
For more information on this program, and a specific analysis of how it would benefit your facility, please contact:
Marshall Clark, NGS Program Manager
Marshall.Clark@dgs.ca.gov
(916) 375-5990
Celia Torres, NGS Customer Specialist
Celia.Torres@dgs.ca.gov
(916) 376-5274
Joyce Yohner, NGS Customer specialist
Joyce.Yohner@dgs.ca.gov
(916) 375-5986
Mason Bancroft, NGS Customer Service Specialist
Mason.Bancroft@dgs.ca.gov
(916) 375-5992
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