The Metro Nashville District Energy System uses natural gas as a primary fuel source for generating and distributing steam throughout the system
Large demand customers like the Metro Nashville District Energy System can purchase their natural gas as either a non-interruptible or interruptible service, but the interruptible service is priced at much lower rates. In order to qualify for the interruptible service, a back-up fuel source must be maintained. The Metro Nashville District Energy System benefits from being a large demand customer and qualifies for the interruptible service by using propane as the back-up fuel. Being on an interruptible rate enables the Metro Nashville District Energy System to purchase natural gas on the spot market. Purchasing natural gas at spot market prices typically saves the Metro Nashville District Energy System customers approximately 50% over buying natural gas at non-interruptible rates.
Individual or stand-alone buildings generating their own steam or hot water from natural gas-fired boilers are not a large demand customer and do not qualify for the interruptible rate. Therefore, they have to purchase natural gas at the non-interruptible rate from the local gas supplier. By being part of the Metro Nashville District Energy System, our customers benefit from our collective purchasing power and maintaining a back-up fuel source.
The Metro Nashville District Energy System has also adopted a commodity hedging policy that takes advantage of market fluctuation through the purchasing of natural gas at future rates. Recent volatility in the market has resulted in much higher than normal natural gas prices for this summer and through next winter. However, the Metro Nashville District Energy System took advantage of commodity hedging opportunities and expects the cost for their natural gas to be 80% or less than what it would have otherwise been without the hedging program over this same period.
The Metro Nashville District Energy System customers should enjoy an additional 20% cost savings for their steam over the next year by being part of Nashville’s district energy family.