Glossary of Terms

Deregulation
The process of lessening the amount of government regulation and oversight applied to utility companies. As with other industries that have been deregulated, natural gas deregulation has increased customer choices. Before deregulation, utilities charged their customers for all the necessary steps to get the natural gas from the production field to the customer's home or business. This included purchasing the natural gas, delivering it to the customer, measuring the customer's use, providing emergency service, and billing the customer. The complete package of services has been unbundled so that a customer can choose to separate the gas purchasing transaction from the delivery transaction.

Natural Gas Suppliers
Any party that has executed a Supplier Agreement with Washington Gas to deliver gas supplies to customers.

System Charge or Customer Charge
Covers certain costs of providing your service--depreciation, taxes, maintenance and repair of customer lines, and customer-related expenses, like meter reading and billing.

Distribution or Delivery Charge
After the gas supply purchased on your behalf is delivered to the Washington Gas system, it must be delivered to your home. The Distribution or Delivery Service Charge covers the cost of moving your gas through the Washington Gas system to the meter. This charge is the same amount whether you buy your gas supplies from a natural gas supplier or from Washington Gas. The monthly Distribution or Delivery Service Charge is based upon the amount of gas you use.

Purchase Gas Charge
This is the cost of the natural gas commodity and the cost of transporting it to the Washington Gas system. This charge can be used as a benchmark for comparing prices. If you elect to buy gas supplies from a third party, this charge will no longer appear on your Washington Gas monthly bill.

Balancing Charge
Effective April 2001, the balancing Charge is billed to third party suppliers by Washington Gas to cover a portion of Washington Gas's capacity and peaking operations costs. The Balancing Charge does not include a portion of Washington Gas's storage costs, which are billed separately to third party suppliers.

Single Billing
Combines Washington Gas and natural gas supplier charges onto one bill. The bill can either be provided by Washington Gas or by the supplier.

Separate Billing
Two bills are generated. Washington Gas sends the customer a bill for the System Charge and Distribution or Delivery Service Charges and the natural gas supplier sends the customer a bill for the gas.