There is an administrative group to cover accounting, royalty payments, taxes, balancing, transportation, etc., in moving from field to buyer, regardless of whom the buyer might be. The producer has numerous alternatives to marketing its production including having the whole function outsourced, including the administrative part. Many marketing companies, usually the non-regulated business of a pipeline either in interstate or intrastate transportation or part of an LDC, offer more marketing services than just physical gas sales. The regulated sale of gas by utility companies at the local level would still be a marketing company although these regulated sellers are still operating strictly as utilities. If the utility wants to do additional marketing activities, its non-regulated subsidiary would be responsible.
Most utilities own units to compete against other marketers operating in an open access state.
There is a major difference between a utility and regular marketing company, besides the actual manner of selling gas. The utility earns a rate of return rather than a typical profit. The agency decides what percentage of the company s capital will be allowed for that rate. It is not a guaranteed rate of return but, if the utility is managed properly, it will earn the rate allowed and sometimes a little extra. Marketing companies that are not regulated operate as any other business and earn money by making profits.