Distribution is regulated by states. After reaching market hubs or city gates, local distribution companies (gas utilities) take ownership of the gas and deliver it to about 62 million customers on about 540,000 miles of distribution mains. Additionally, large industrial customers and power plant operators can have gas delivered through small lateral pipeline connections if the plants are located close enough to the pipelines. If the industrial plants or power plants sit on top of utility mains, they can contract with a utility for capacity on their distribution system.
Gas utilities, which deliver gas to residential and commercial uses (24% residential and 15% commercial), buy gas from producers or marketers and contract for transportation on the pipelines on a long-term basis in order to secure supplies for the winter. Power plant users (27%) also buy gas from producers or marketers and contract for firm capacity in order to secure supply for the summer. Industrial natural gas consumers (34%) typically use the pipelines on an interruptible basis and buy gas through marketers or producers as well. Even though industrial users use the most gas, they do not contract for transportation on a long-term basis. Industrial users take advantage of lower interruptible rates and lower gas prices. They need to be opportunistic. When gas prices are high, industrial users will lower consumption of gas. This happens during the winter peaking months if gas is scarce in storage.