When people think about energy deregulation, they often picture a marketplace where you can simply pick your electricity or gas supplier online, like shopping for a cell phone plan. But in many states—especially when it comes to natural gas—deregulation doesn’t always look like that.
Instead, it often comes in the form of something called a Transportation Service Program.
Let’s break down what that means, who it’s for, and why it matters.
In a fully regulated market, your utility owns both the delivery infrastructure (pipes or wires) and the commodity itself (gas or electricity). You don’t get to choose your supplier—they provide it all.
In a deregulated market, you still get energy through the utility's infrastructure, but you can choose a different company to supply the gas or electricity. This allows for competition, better rates, and more contract flexibility.
But in some states—especially for natural gas—residential customers might not get that choice. Instead, only larger users like manufacturers, universities, or commercial buildings can participate. And they do it through what's called transportation service.
A Transportation Service Program is a type of deregulated service where:
You still get natural gas delivered through your utility’s pipelines
But instead of buying gas from the utility, you buy the commodity from a third-party gas supplier
The utility just “transports” the gas to you and charges a delivery fee
Think of it like this:
You're allowed to shop for your groceries at any store you want (the supplier), but the same delivery driver (the utility) still brings them to your house.
These programs are typically only available to larger commercial or industrial customers who:
Use a certain threshold of natural gas (e.g., 5,000 therms per year)
Have steady usage patterns that make alternative contracts feasible
Are located in utility territories that offer transportation service
Residential customers usually don’t qualify, even in states where this kind of deregulation is technically allowed by law.
The Transportation Service Program gives large gas users the ability to:
Negotiate better gas prices through volume contracts
Hedge against market volatility
Choose suppliers that offer better terms or green gas products
It also allows the utility to focus solely on what it does best: delivering the gas safely and reliably.
You’ll find transportation programs in partially deregulated gas states like:
South Dakota
Colorado
Indiana
Wisconsin
Virginia
But just because the option exists doesn’t mean there’s an active market. In many of these places, only a few large customers use the program, and residential choice isn’t available at all.
Transportation Service Programs are a key—but often overlooked—part of the energy deregulation landscape.
They aren’t flashy, and they aren’t available to everyone. But for larger businesses and industrial facilities, they offer a way to take control of gas purchasing while still relying on the utility to do what it does best: deliver energy safely and efficiently.
If you manage a commercial property in a state with partial gas deregulation, it might be worth asking:
Can we qualify for transportation service? And if so, who can supply our gas more competitively than the utility?
That’s where the opportunity lies.