Glossary
Industry terms can often help you better understand our business.
Hedge, Hedging: The use of derivative commodity and interest rate instruments to reduce ἀnancial exposure to commodity price and interest rate volatility.
Risk: Exposure to uncertainty.
Units of Measure:
Mcf = Thousand cubic feet
Bbls = Barrels (42 U.S. gallons)
MMcf = Million cubic feet MBbls = Thousand barrels
Bcf = Billion cubic feet
MGal = Thousand gallons
MMBtu = Million British thermal units
BBtu = Billion British thermal units
ONEOK Energy Marketing also has specific terms that can help you better understand the services we provide. A list of frequently used terms is included below.
Market Index Adder
Charges above the commodity (natural gas) cost to cover transportation, storage and other components for the commodity.
Blended Rate
This is a combination of a fixed rate and a market index rate. Sixty-five percent of your monthly volume will be at a fixed price. The remaining 35 percent of your monthly volume will be at the PEPL Index plus your Adder. This price option is the middle ground. You can take advantage of the dips in the market price for natural gas without being fully exposed to the upward swings.
Fixed Rate
A fixed price per dekatherm consumed for 12 months. Your gas bill will vary based only on your gas usage. This price option has the least amount of risk because you are not subject to price swings in the natural gas market.
Market Index Rate
The Market Index Rate is comprised of two components -- the PEPL Index and the Adder. The PEPL Index portion of your price changes monthly with the market, while your Adder stays the same for 12 months. This option has a higher amount of price risk to the customer because it is subject to swings in the natural gas market. If natural gas prices increase, so will the price you pay per dekatherm. However, if prices go down, the amount you pay per dekatherm also will go decrease.
New York Mercantile Exchange (NYMEX)
The natural gas commodity exchange on which gas futures contracts are purchased and sold to lock in gas prices.
PEPL Index
A pipeline index published monthly that best reflects the market value of natural gas in Nebraska.
Therm
The unit of measure used to determine the quantity of natural gas you are receiving at a particular rate. The typical household uses about 1,000 therms per year.