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Local Distribution Company

Trading Term

A local distribution company, abbreviated LDC, is the regulated utility that delivers natural gas to end users within a defined service territory. LDCs and large gas consumers submit daily pipeline nominations stating how much gas they intend to take, and decide whether to draw from storage or purchase spot supply, decisions that depend heavily on expected temperature. A colder day than anticipated can force purchases into a rising spot market, which is one mechanism by which next-day temperature uncertainty becomes financial exposure for gas distributors and for the parties serving them.

Energy expenditure implications of next-day temperature forecasts

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