Long term contracts in portfolios of core LDC gas supply

This paper recommends that local distribution companies (LDCs) should use a portfolio approach for their gas supply strategy. The author recommends that LDCs not rely on spot supplies to meet the peak needs of the core residential and commercial markets. He recommends that a secure supply through long-term contracts are better sources than spot or even intermediate term suppliers. The paper provides a brief outline format of the advantages to the use of a portfolio approach which include the rapid restructuring of the market, general changes in the market, and general market performance. By maintaining a portfolio, a list of available natural gas suppliers is always available. This portfolio also acts to compare pricing between short, medium, and long-term pricing for the LDCs