While some local gas utilities will continue struggling toinsulate their small customers from high gas prices and pricevolatility, NIPSCO announced yesterday it will begin offeringselect residential customers and all of its non-residential buyersan option of fixing or capping their commodity prices for up to oneyear starting in May. The program was approved last October as partof NIPSCO’s Alternative Regulatory Plan.

“Currently NIPSCO buys natural gas at market prices. When themarket experiences price swings, the commodity charge on thecustomer’s bill reflects those fluctuations. Through our [PriceProtection Service] program options, however, customers can beassured of the natural gas prices they will pay throughout theyear,” said Mike Gahimer, NIPSCO’s manager of pricing services.

Enrollment, however, will take place during a small window,April 13-24, to “prevent the added risk of there being a disconnectbetween the time in which the price is out there offered tocustomers and the time we have to react and either buy the gas andlock in that price with a supplier or hedge it,” said NIPSCO’sJames K. Abcouwer, vice president and general manager of customerservice. “Our objective was to give one price out to customers andlet those customers shop that price, think about that price andcommit to it if they wish.”

He said the fixed price will include a certain cost-basedpremium that will be added to the futures strip to pay for theadministration of the program. “We’ve seen 10-20% movement in thegas market on a daily basis over the last couple years. So thelonger we have that set price out there the more risk we take on.”The fixed price, including the premium, will be set by April 13.

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