Understanding Natural Gas Deregulation

What is Natural Gas Deregulation?

Natural gas deregulation refers to the restructuring of the natural gas industry to allow competition in the supply of natural gas to end consumers. In deregulated markets, businesses and sometimes residential customers can choose their natural gas supplier, while the local utility continues to transport and deliver the gas through its pipeline infrastructure.

How Deregulation Works

In a deregulated natural gas market:

1. Utilities handle delivery: Your local gas utility maintains the pipelines and delivers gas to your business
2. Suppliers provide commodity: Third-party suppliers compete to sell you the actual natural gas
3. You have choice: Businesses can shop among multiple suppliers for the best rates and terms
4. One bill: You typically receive one bill that includes both delivery and supply charges

Benefits of Deregulation for Businesses

Natural gas deregulation offers several advantages for commercial customers:

• Competitive pricing: Multiple suppliers compete for your business, driving down costs
• Contract flexibility: Choose contract lengths and pricing structures that suit your needs
• Price protection: Lock in fixed rates to protect against market volatility
• Budget certainty: Predictable energy costs for financial planning
• Service options: Suppliers may offer value-added services and support

Deregulated States for Natural Gas

As of 2026, the following 15 states have deregulated natural gas markets allowing commercial customers to choose their supplier:

1. Connecticut
2. Delaware
3. Georgia
4. Illinois
5. Indiana
6. Maine
7. Maryland
8. Massachusetts
9. Michigan
10. New Jersey
11. New York
12. Ohio
13. Pennsylvania
14. Texas
15. Virginia

Note that deregulation varies by state—some states have full deregulation while others have partial deregulation or pilot programs.

Fixed vs. Index Pricing

In deregulated markets, businesses typically choose between two main pricing structures:

Fixed-Rate Pricing

• Lock in a set price per therm or CCF for the contract term
• Provides budget certainty and protection from price spikes
• May miss out on savings if market prices drop
• Best for businesses that prioritize budget stability

Index Pricing

• Price fluctuates with the market (usually based on NYMEX or local indices)
• Can save money when market prices are low
• Exposes you to price volatility
• Best for businesses with flexible budgets and higher risk tolerance

Blended Strategies Many businesses use a combination of fixed and index pricing to balance risk and opportunity.

How to Get Started

If your business is in a deregulated state, here's how to start saving on natural gas:

1. Gather your usage data: Collect recent gas bills showing your monthly consumption
2. Understand your current contract: Check your current supplier, rates, and contract end date
3. Work with a broker: An energy broker can obtain quotes from multiple suppliers
4. Compare offers: Review rates, terms, and contract conditions
5. Make an informed decision: Choose the option that best fits your business needs
6. Enroll: The switch typically takes 1-2 billing cycles with no service interruption

Why Work with Natural Gas Advisors?

Navigating the deregulated gas market can be complex. Natural Gas Advisors helps businesses:

• Understand their options in deregulated markets
• Obtain competitive quotes from multiple suppliers
• Compare offers and contract terms
• Negotiate favorable pricing and conditions
• Manage contracts and renewals

Our services are free to businesses—we're compensated by the suppliers we work with.