Understanding Your Natural Gas Bill

Rates For Residential Natural Gas Service Have Three Parts:

1. Customer Charge: This charge covers a portion of the gas company’s fixed costs that it incurs to serve each residential customer. This charge allows natural gas utilities to recover customer specific expenses such as meter reading costs, billing costs and investments in meters and service lines. This charge appears monthly on a customer’s bill regardless of usage.
2. Commodity Charge: This charge covers all other costs to operate the business such as salaries, a return on investment and any other non-gas cost for running the business. The total amount of this charge varies based upon the amount of gas used by the residential customer.
3. Purchased Gas Adjustment Charge (PGA) : This charge represents the cost of gas purchased from producers of natural gas, the costs to store natural gas in storage fields and the cost to transport natural gas via interstate or intrastate pipelines from the production fields for use by the residential customer.

These three parts represent a customer’s monthly bill for natural gas usage.

How To Read Your Gas Meter

Natural gas use is measured in cubic feet and is billed in units of 100 cubic feet (1 ccf). Each unit of measure shown by the right hand dial is 100 cubic feet or 1 ccf. For example, the reading in the illustration below is 4985 ccf.

Natural Gas Units Of Measurement

• Ccf: The most common unit of measurement applied to natural gas usage. This measurement represents a unit of volume equal to one hundred cubic feet.
• Therm: This measurement is equivalent to one hundred cubic feet or 1 Ccf.
• Mcf: A unit of volume equal to one thousand cubic feet.
• mmbtu: This measurement is equivalent to one thousand cubic feet or 1 Mcf.

Tips For Reducing Your Natural Gas Bill

• For heating, set the thermostat at 68 degrees Fahrenheit during the day, 60 degrees Fahrenheit at night and turn it down or off when you are away or on vacation.
• Install a clock thermostat for your furnace that turns the heat down automatically when you are away or asleep and brings the temperature back to a comfortable level before you return or get up.
• Open draperies to let the sunshine in on bright days. Consider using insulated draperies and shades. Close draperies or pull down shades at night, or when temperatures drop.
• Insulate to keep the heat where it is needed most. The attic is one of the most important places to insulate. The insulation's R-value is the measure of how well insulation keeps warm air from escaping through it. The higher the number, the greater the insulating value.
• Stop air leaks and cut air drafts. Gaps and holes where plumbing pipes and wires enter the home and around exhaust fans and vents as they exit the home should be caulked and stuffed with insulation. If you can see daylight or feel a draft through a crack under or over a door, you may want to consider weather stripping.
• If you have a dishwasher, set the temperature on your water heater to 130-135 degrees. If you do not have a dishwasher, a setting of 120 degrees Fahrenheit is considered efficient and sanitary.
• Use a water heater insulation wrap to avoid heat loss through the tank walls.
• If you have a fireplace, keep the damper closed unless you have a fire going. Glass doors on the fireplace can help stop air leakage. If you use the fireplace to heat your home, investigate a blower to circulate the warm air.

Purchase Energy Efficient Appliances For Your Home.

When you are shopping for new natural gas appliances, look for the EnergyGuide label with information on operating costs and energy efficiency. The information displayed on the label should include:

• Estimated yearly energy cost;
• A range of estimated yearly energy costs of competing models in the same product category;
• A statement that energy costs will vary with local rates and individual use patterns;
• A table showing the energy cost of the appliance based on a range of utility rates and, when applicable, on consumer use patterns.

Ask your salesperson to show you how you can use this EnergyGuide label to compute the payback time for energy-efficient appliances. You must know the price you pay per Ccf of natural gas. Do this by dividing the total amount of your bill by the total amount of Ccfs used.