Glossary of Terms

Billing Cycle
The amount of time covered by one bill. Not all customers’ billing cycles run from the first day of the month, to the last day of the month.

A payment option that divides a customer's estimated costs into equal monthly payments. This type of plan allows customers to pay the same amount on their bill each month over a specified period of time.

The natural gas you use, not including any services provided by the supplier or utility.

Delivery charges
Charges that cover the operating and distribution costs of the utility to safely maintain its pipeline system.

Early Termination Fees
If applicable, the charge a customer must pay to a Choice Supplier if the customer chooses to exit the agreement prior to the conclusion of the agreed upon term. 

Fixed Rate Plan/Pricing
The constant price for natural gas supply (either per therm or per bill) that is maintained over the entire life of a contract. Changes in the market price of natural gas will not affect the price you pay. 

Interstate Transportation/Storage Charge
This price represents the cost to transport natural gas from production areas to NIPSCO’s distribution system.

Market-based or index pricing
An offer for natural gas at a price that is tied to one or more natural gas market benchmarks or indicators. Some of these are Natural Gas Intelligence, Gas Daily and NYMEX. This type of pricing generally fluctuates and follows the current market price of gas over the life of the contract.

An acronym for the New York Mercantile Exchange where contracts for commodities, including natural gas, are traded. At the NYMEX, natural gas futures and options contracts are traded which establish future pricing directions. Suppliers may use the NYMEX to establish their pricing offers.

A company other than the local utility that supplies natural gas to customers.

The basic unit for measuring natural gas use.

Variable Rate Plan/Pricing
A price that may fluctuate over the life of a contract, sometimes tied to a market index (see Market-based or index pricing).

  • Variable Capped Rate – The gas commodity portion of this price is subject to change, but the price will not exceed a stated amount.
  • Variable Rate Plan – The gas commodity portion of this price changes on a month-to-month basis. The price listed is for the first month of the contract.