Fundamentals of utility gas-acqusition strategy for the 1990s (in 600 words or less)

The reliability of gas supply required by gas-distribution utilities and electric utilities on behalf of their essential-service (core) ratepayers is reliability at the point of delivery. This kind of reliability is not for sale in the field at any price, but depends on control over firm transmission and storage capacity, and/or over gas flows that can be readily interrupted or diverted, or on the existence of markets that offer assured access at a price to these elements of supply. Such markets firmly entrenched themselves for the natural-gas commodity during the 1980s, and are now emerging rapidly for transmission and storage services. There will seldom be any reason for utilities to pay producers a contractual premium for open-quotes firmnessclose quotes of gas supply at the point of production. In the new open-architecture gas market, there will be an infinitely diverse range of elements from which utilities can choose in assembling a gas-supply portfolio. The utilities will henceforth be accountable to the ratepayers and the community through their respective utility commissions for both the strategies chosen and their performance in terms of gas costs and supply reliability