Firm service is the highest priority utility, gas pipeline, gas storage, electric transmission, gas purchase, or electric purchase level of service. Firm service does not guarantee delivery of the service, but it guarantees that customers taking firm service will be served prior to lower priority customers. Firm service is differentiated from interruptible service, which is lower priority and typically costs less or requires lower levels of fixed payments.
For end-use utility customers, firm service is typically provided to residential and small commercial customers as standard service. For gas service, larger customers often must pay a higher rate to be classified as firm, otherwise their loads are treated as interruptible. For electric service, larger customers typically have the option of paying a standard higher rate for firm service or choosing a lower interruptible rate.
Gas pipelines, gas storage facilities, and electric transmission companies typically offer two levels of service – firm and interruptible. Gas and electric purchase agreements define whether the agreement is for firm supply or interruptible supply. Buyers must weigh paying higher prices for firm supply against the risk of buying interruptible supply that may not be delivered but is available at a lower price.